The game is telling me that in order to drink potions, I must enter Meditation Mode, but it doesn't give me any clue how to enter Meditation Mode in the first place. How do I do that?
The Meditation option is in the center of the radial menu, which is accessed through left-Ctrl. This is also where you can select magic for quick cast and your melee weapon.
If you are playing on Xbox, hold down "Select"/"Back Button" and press A.