A "pill" is slang for a transistor. A "100 watt pill" is a reference to the amount of output that transistor can produce.
Legal? I guess that's a matter of opinion and how the slang is used. Slang is just another name for something, it can be confusing, but I don't know about illegal. As for the power rating of a 'pill', that's just physics. Would a "100 watt pill" be legal for use with CB radio? If it's output power is limited to the regulation amount, there's nothing wrong with it. But, in most cases, sure, it would be illegal if ran at it's rated power level of 100 watts, and if it wasn't in the radio when it was approved for CB use, then it's a modification and illegal. Makes sense?
- 'Doc