Feste is a character that is famed for his use of puns in this excellent comedy. He, as befitting his role of fool, shows himself to be an excellent punner and displays a verbal dexterity that proves his supremacy in this area. Note how even from his first introduction in the play in Act I scene 5, he quickly evinces this ability. When Maria tells him he will be hanged for his absence, note how Feste replies:
Let her hang me. He that is well hanged in this world needs to fear no colours.
Here, colours is punned with an alternative meaning to this word, which is worldly deceptions, but it is also punned with collars, which refers to halters or nooses. This is something we see Feste engaging in throughout the play. Note how in Act III scene 1 when he is with Viola he willfully misinterprets her question, and when she asks Feste whether he "lives by" his musical talent, he responds by saying that he "lives by the church." Such verbal quickness is one of the reasons why Feste is such a memorable and funny character in this comedy.
A pun is a play on words which reveals a clever and often humorous double meaning for a word or the sound of a word. Puns are widely used in literature but in the twenty-first century they are sometimes cliche and so they do not always achieve their desired result. In order to benefit from a pun, the response needs to be spontaneous; otherwise the joke is often lost when the implied meaning is not shared.
Shakespeare uses puns generously in his works and in Twelfth Night, Feste the Fool or clown is an intelligent and astute man, a keen observer and well-placed to recognize weakness in others. In Act I, scene v he quips "Better a witty fool than a foolish wit" (33) having just bantered with Maria over the benefits of being hanged and therefore avoiding "a bad marriage" (18). He says "I am resolved on two points" (21) and Maria shares this pun when she comments on the "points" used to hold up his trousers.
When Olivia instructs "Take the fool away" (35), Feste immediately responds that she must mean herself. He says, "Do you hear, fellows? Take away the lady." The "fool" is a duly-appointed jester or entertainer and no fool at all but he is again using a pun suggesting that Olivia must be the real fool and he can prove it. He suggests that Olivia's state of mourning for her brother is misplaced as he is surely in heaven not hell; thus proving that she is foolish as why would anyone mourn for a soul that is peacefully in heaven.
When Feste talks to Viola and she asks him about his tabor or drum and whether he "lives by" it (III.i.2), she is inquiring whether it is essential to his profession and from which he makes a living but he uses a pun in taking her intended meaning of "live by" and advises that "I live by the church." He means that he lives next to the church and not that he is a clergyman; thereby purposefully misleading her. Viola is happy to continue the thread and recognizes Feste's sharp wit.