What does this quote mean from "Hardball?"?

Question

"Better to have them pissin' inside the tent than outside pissin' in."

Answer 1

Better to have them on your team and doing wrong to you than to have them outside your team and doing wrong to you?

That's a toughie.  Good question!

Answer 2

it's better to be feared (to have someone so afraid that they p**s themselves instead of coming out of their tent) than to be disrespected (to have someone boldly p**s on you)