You "wipe up" a liquid by using a towel or paper towel to get rid of it. When you name the thing you're wiping up, you say it after "up":
Can you wipe up that milk on the counter?
When you use "it", "that", "this", or some short noun, you put it before "up":
Can you wipe it up?
Can you wipe the milk up?
Compare "wipe up" to "wipe ___ off (of something)". You use "wipe off" for something that's stuck onto something, like dust, grease, or some kind of mark:
Let me wipe the dust off of that before you use it.
And "wipe" can also be used in the phrase "wipe ___ down", which means to wipe something all over in order to clean it:
Don't forget to wipe down the counters and the top of the refrigerator.