Knockout is the opposite of overprint; it is the notion that painting an object over another object completely obliterates the bottom object. To see knockout in action, grab a window on the desktop of your computer and move it over another window. Or take a piece of paper and move it over another paper. The bottom object disappears; its colors don't mix with the colors of the top object (as would be the case with overprint).
The three circles below show the knockout principle. Each circle that is painted completely hides the objects underneath. Where yellow and cyan overlap, you don't see green, you see yellow because the color of the yellow object knocks out the underlying cyan color.
It's interesting to note that while this seems obvious, but in printing it typically isn't. The inks used in printing are typically more or less transparent and will mix to a certain degree (dependent on the printing process, type of ink and material you print on). If you have trouble imagining that, imagine the wall in your kitchen painted in bright red and you wanting to re-paint them in soft yellow. That will be a painful exercise because wall paint, just as printing inks, are often not completely opaque.