This is based on a slave song. To keep up the work and entertain themselves, they were singing the "Green Sally, Up" song (And no, it's not "bring Sally up / down", it really is "green Sally up / down").
Old Miss Lucy refers to the slave's owner, while Sally is a little girl. It comes up with a dance, where people had to jump and squat (explaining the "las one squat, gotta tear the ground") in rhythm to the song.
You can listen to the original whole song her:
https://www.youtube.com/watch?v=fPBJRwp7eEQ