From the game's encyclopedia
Piety represents the virtue of a Character.
Acting piously (according to the Doctrines of their Faith) will increase a Character's Piety, such as going on a Pilgrimage.
Piety can be spent on various religious matters depending on Government Form, Doctrines, etc.
Each time a Character gains Piety, they also progress towards the next Level of Devotion.
The game's text for patch 1.20.1.2. Words in blue are entries of the encyclopedia: hover one to read it, as in the game.
Piety is an entry of Crusader Kings III's in-game encyclopedia. The game explains it: "Piety represents the virtue of a Character." It covers Devotion and Level of Devotion. The game also links it as Pious. Patch 1.20.1.2, from game/common/game_concepts/00_game_concepts.txt and game/localization/english/game_concepts_l_english.yml.
Source: game/common/game_concepts/00_game_concepts.txt, game/localization/english/game_concepts_l_english.yml and the English localisation, Crusader Kings III 1.20.1.2.