Criticism of people, customs, or institutions through ridicule, exaggeration, or irony.
In Don Quixote
the intent is to bring down the ill-founded machine of these chivalric books, loathed by so many and praised by many more.
The sentence declares the attack on "these chivalric books," at once "loathed" and "praised," and it is this tension that the promised laughter will exploit against a genre of enormous prestige.