To undermine an enemy faction in Elite Dangeorus Powerplay you head to a controlled system of the enemy and blow up any ships that you see of opposing factions. Each ship will earn you 30 powerplay merits. This is a guide to undermining.
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You can only undermine control systems of other powers. If you click on a control system of an opposing power in the galaxy map with “power play” selcted from the “view” tab and then click the icon that looks like a bar graph (on the pop-up when you click on the system) you will be taken to a Power Play screen that tells you the current status of the system (fortify/undermine) and what the particular undermine task for that system would be.
Jump to the control system of an opposing faction. Supercruise around and wait for NPC’s to spawn-in. Lock onto the NPC’s and point your ship at them. After a few seconds you will know if they are affiliated with a Powerplay faction. Interdict them. Kill them. Jump back to supercruise before the authorities show-up to investigate the murder. Repeat for more merits.