Before landing and taking off, I notice the lights inside commercial aircraft are greatly reduced. I don't buy the explanation of power saving in case full thrust is needed as nowaday lights don't need a lot of energy and the crew says we can use the smaller reading lamp to continue reading. I suppose this is something to do with security but I don't understand what.
This is for safety reasons.
Take-Off and Landing are the two most critical phases of flight and thus, every additional step to ensure survivability, be it even just adjusting the light, is taken.
The interior lights or cabin lights are adjusted to match the exterior environment, so that in case of an emergency, especially if the interior lights fail, your eyes are already accustomed to the light setting and you do not require additional valuable seconds for adjustment to a possibly darker or brighter environment. The lights are usually adjusted at dusk, night or dawn to match the exterior environment.1
If the cabing lights do not fail during an emergency, the dimmed light also makes it easier to identify the "EXIT" signs which illuminate and make the guidance lighting on the floor easier to follow. The bright emergency lighting is more prominent to identify when the cabin light is dimmed, saving valuable seconds as the aircraft is evacuated.
This also ties in with having to raise the blinds on the windows. The blinds need to be raised during take-off and landing irrespective of the outside light situation, however, with a darker cabin, any outside light source, especially from fires or other hazards is easier to identify by the crew, making the decision process of whether one side could be inappropriate to use for evacuation faster, e.g. fire on port side --> no evacation on that side.
The blinds are therefore raised to allow a better view for cabin crew of the outside area and external aircraft parts, such as engines, wings, etc. See also this related question: Why open up the window shades before takeoff and landing?
My flight instructor told me that also, when taxiing at night (that is, before taking off or after landing), lights should be kept at a minimum as a courtesy to other pilots. A bright line of full lit cabin windows could distract or mask other dimmer lights like the taxiways blue ones.
You are right.
The 'power saving' theory is nonsense. Most of the time, except at 'hot and high' airfields, aircraft take off using much less than maximum engine thrust (known as de-rated or 'FLEX' thrust setting), so turning off the lights to reduce the generator load doesn't make any sense. It is also worth noting that cabin crew require the lights to be dimmed during landing as well, not just take off, and that would have no 'power saving' benefit whatsoever. The A/C packs may be turned off during take off because they use bleed air from the engines, which does have an effect on thrust output. This would only really be necessary with a high take off weight or short runway.
The "line" about needing full power for takeoffs and landings is true. I was taking courses for an Airframe & Powerplant certification for airplane mechanics. According to professors at what used to be the Northrop Rice School of Aviation Technology in Los Angeles, California, all power in an airliner is diverted to the engines for maximum thrust on takeoff. That means the lights are turned off or dimmed and even the air conditioning is turned off until after takeoff. As we all know, the airplanes are getting bigger and bigger. However, the length of the airport runways has not changed much at most of the airports. That means that the pilots of these jumbo jets have to get up to their airplane's noted speed for takeoff faster (before they run out of runway). So all "redundant" systems on an aircraft are shut down so that power can be used to get that airplane off the ground safely in the distance they have to get lift. Flying is all about the power to weight ratio on any aircraft. But the jumbo jets require a much higher speed to be able to take off.
You better start believing in the explanation of power saving.
I couldn't find the reference, but there was an accident over 5 years ago in which a plane was taking off with many non-essential loads at or near maximum: air conditioning, galleys heating food, cabin lights.
One generator failed, and the system supposed to shed non-essential loads also failed. The remaining generator wasn't designed to stand so much load, so it failed too. Loss of power to essential loads.
Since then, airliners take off almost simulating an electrical emergency. Reading lamps are a reasonable compromise because very few people actualy use them.