Satire means making fun of things in order to show their flaws and (ideally) improve them. Teasing someone for being new in school wouldn't be satire; it would simply be mean. However, exaggerating some social stupidity to show what was wrong with it would be satire.
In this story, my favorite example of satire is when the priest tries to speak to the "angel" in Latin, assuming that the language of the medieval church would somehow be a divine language.
satire is the act fo making fun of something or someone! - In this story the author is making a satire out of the church! the priest represent the church and yet when he confronts the angel he did couldnt provide any answers and instead he tried talking to him in latin by saying thats the language of god and that he would know at least how to greet his misisters!!!! Pretty funny because he is the one who suppose to have faith right?> and yet because the 'angel' did not look exactly what he expected him ( clean, beautiful) he refused to believe.! its like the church is being cynical/ hypocrite!