The phrase means literally "good song" or "good DJ". selecta is the DJ ("the selector"). But why that spelling? And where does bo come from? Is it from the French beau or the Latin bona? Is there a link via Jamaican English? What evidence of use exists prior to the 1999 song?
Learn English – the origin of the phrase “bo selecta”
etymologymusic
Related Solutions
Of the Onelook results (excluding Wiktionary (and Worknik which just references Wiktionary)), all define it as "drunk"/"full" (like the OED).
As you only stumbled upon the word in Wiktionary and haven't seen it used for "crazy" in English, and as Wiktionary is editable by anyone, it may be a mistake, but it may also be a new English (loan-)word which isn't very common or widespread.
As it happens, Wiktionary's original English entry was for "Drunk" (28 August 2008). Someone without a username changed it to "Crazy" on 17 November 2010. There's no other edits recorded against their IP address, which as it happens resolves to Canada, a country whose official languages are English and French. My guess is either someone mixed up the French and the English words, or that some people in Canada really do use the word fou to mean "crazy". However, I don't expect this is very widespread, and most other speakers of English won't recognise it (meaning either "crazy," "drunk" or "full"), so I'd advise not to use the word in English.
Hawthorne
The adjective peachy keen was popularised and probably invented by LA DJ Jim Hawthorne around 1948.
Time Magazine
The OED has peachy-keen from 1951, but here's a couple of antedatings from Time Magazine in 1948.
First from Monday, May 10, 1948:
Radio: Peachy-Keen
Jim Hawthorne, a young Pasadena disc jockey, used to be bored with his job ($85 a week). Sometimes he would sign off with a sneer: "This is KXLA, the 10,000-watt jukebox." But he is bored with his job no longer.
One night, without notifying his bosses, Hawthorne suddenly turned his show into a carefree, wit-loose "Hellzapoppin on the air." Next day, before the station had time to fire him, the place was snowed under with fan mail. By last week, the scattyboo platter session was being broadcast over five Southern California stations ("the net-to-net coastwork of the Oh-So-Peachy-Keen Broadcasting Company").Both ABC and Mutual were dickering for national network rights. Hawthorne's salary is now $450 a week. The Hawthorne formula is a well- stirred ragout of one part Henry Morgan, three parts Arthur Godfrey and a dash of Colonel Stoopnagle; it is a blend of the outrageously unexpected and the shaggy dog joke. In the middle of a recording, voice may suddenly announce: "I've got cole slaw in all my pockets I'm cold." Sometimes Hawthorne heckles his lovesick records. "What are you in the mood for, honey?" he will ask during the opening bars of a song. "I'm in the mood for love," the record croons back.
Whatever adults — and sponsors — may think of such carryings-on, Hawthorne and his peculiar banana-split lingo have become the rage of Southern California's younger set. Most popular root word is "hogan" (example: "I was driving my carahogan in from Pasadena-hogan so I could get a hoganburger"). The young folks also overwork Hawthorne's favorite adjectives: keen, peachy-keen, and oh-so- peachy-keen.
Next from Monday, Oct. 11, 1948:
Music: Gumbo
The piece begins with a wolf call, and ends with all the instruments thrown into a corner. It is scored for ukulele, kazoo, hogan-twanger (wooden box and hacksaw blades), cardboard box, seal barks and an Indian elephant bell. It has words like this:
The boy I mean was oh-so peachy-keen,
A real gone guy from Goneville.
He was scattyboo and oogledy-too,
And he lived in Pasahogan.
The title of the piece spells Nature's Boy backwards. By last week Serutan Yob had sold 350,000 records, and Capitol was threatening to make at least a million.
(Both use the word scattyboo and other contemporary slang.)
Listen here and read the lyrics in full here. Wikipedia says:
A parody named "Serutan Yob" was recorded by The Unnatural Seven, an offshoot of Red Ingle and his Natural Seven that did not include Ingle due to the 1948 AFM recording ban. The record featured vocals from Karen Tedder and Los Angeles DJ Jim Hawthorne. It was released by Capitol Records as catalog number 15210. The record first reached the Billboard magazine charts on 1 October 1948 and lasted 4 weeks on the chart, peaking at No. 24.
There's that DJ's name again, Jim Hawthorne, who delivered the peachy-keen lines quoted above. The book Echo and Reverb: Fabricating Space in Popular Music Recording, 1900-1960 says it was released in August 1948 and can be found in the 11 September 1948 Billboard Magazine.
Best Answer
One explanation is bo is a gunshot, representing appreciation. And selecta is the DJ, the one who selects the music. So when the crowd say "Bo selecta!" they're giving appreciation and want the song played again.
From the Drum n Bass Dictionary:
The phrase "bo selecta" was featured in the 1999 song "Re-Rewind (The Crowd Say Bo Selecta)" by The Artful Dodger featuring Craig David. In the song 'Gunman' by '187 Lockdown', the phrase "bo selecta" can also be heard.