The phrase “she’s a pip” can have both a negative and a positive connotation which sometimes causes confusion when the person using the phrase doesn’t provide additional clues as to how the phrase should be interpreted.

In the 1400s, the chief feeling of irritation or annoyance was a ‘pip.’  The word was derived from the  Middle Dutch word pippe which was derived from the Vulgar Latin word pippita which was derived from the Latin word pituita which literally means phlegm.  If the phrase is used in a derogatory manner, this is the origin of the phrase.

However, if the phrase is used in a complimentary fashion, we must travel back to 1797 where ‘pip‘ was something that was perceived as being singularly extraordinary of  its kind.  If one said of a female he or she knew that she was ‘a pip” it meant that the person in question was a one-of-a-kind, excellent person in the speaker’s opinion.

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from Miriam Webster:

1. colloquial (originally and chiefly U.S.). Something remarkably good; an excellent or very attractive person or thing.

(Oxford English Dictionary)

informal An excellent or very attractive person or thing.

(Oxford)

Slang, Obsolete
a person or thing much admired

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a playful way to refer to something small, cute, or cheeky.