[1] The song is sung in the film by "Uncle Albert" (Ed Wynn), and "Bert" (Dick Van Dyke) as they levitate uncontrollably toward the ceiling, eventually joined by Mary Poppins (Julie Andrews) herself.
Conversely, thinking of something sad literally brings Albert and his visitors "down to earth" again.
The song states a case strongly in favor of laughter, even if Mary Poppins appears to disapprove of Uncle Albert's behavior, especially since it not only complicates the task of getting Albert down, but the infectious mood sends Bert and the Banks children into the air as well.
The scene is based on the chapter "Laughing Gas" in the book Mary Poppins by P.L.
In the book, Mary's Uncle Albert, also called Mr. Wigg, is said to float because of an excess of "laughing gas", although it is clear that the term is not used in the chemical sense.