I highly recommend you visit Prague. It's a beautiful city, and the odds are that you'll just have a wonderful time and nothing will happen. You're more likely to get mugged in North or South America than in Prague. And you can avoid pick-pocketing by making it not worth it for the criminal. Don't carry much with you except a credit card and the cash you're likely to need for the day, and keep those things in FRONT pockets, not in back pockets, a purse, etc. Also, avoid getting caught up in large crowds, where pick-pockets operate most frequently. It doesn't mean to stay away from tourist attractions, it just means that you stand back a little so there aren't people crowded in around you. I've been to Prague in July, and it's entirely possible to do that and see everything you want to see.
That said, I think it's likely at least one merchant will try to rip you off in Prague. Maybe a taxi driver, a street vendor, or a waiter. My first time, I bought a sausage from a street stall and didn't pay attention to the change I was given. It wasn't a huge amount, but I ended up paying about twice the actual cost. IME, this scenario is what you're most likely to encounter, so just be aware and you'll be fine.
I would clarify, these things are common in Europe. I have not noticed this in most other parts of the world. In the US and Canada, for example, pick-pocketing is extremely rare. Getting cheated by a
taxi driver is almost non-existent. But on the other hand, you're highly unlikely to be a victim of violent crime in Europe compared to N. America, S. America, and even parts of Asia. Seems like an OK tradeoff
.