According to C. M. Matthews (English Surnames. Weidenfeld and Nicolson, London, 1966, p. 247), the surname Knott in England comes from the Scandinavian Cnute or Knut, meaning knot.
According to A Dictionary of English and Welsh Surnames, the name KNOTT comes from 1) 'at the knot', the summit of a rocky hill, from residence thereon; or 2) 'the son of Cnut'
The Internet Surname Database adds two other possible origins: the Old English "cnotta", meaning knot or swelling, used to describe a thick-set person; and the Middle English Knot, referring to a hillock or projecting rock, used to refer to someone who lived near such a landscape feature. Alternate spellings suggested inc. the English names of Nott, Note, and Nute, as well as German and Scandinavian variations.
Ancestry.com shows the distribution of Knott Families in England and Wales in 1891 with the largest concentration in Lancashire, at 18% of the population. Similar information can also be found for distribution in the United States.