Knock (aka detontation, "det", pinking) is caused when the fuel and air is burned before the piston gets to Top Dead Center (TDC). This can be before or after TDC and can easily burn a hole in the piston.

The spark timing can be directly related to engine knock or detonation because if the spark is initiated too early it will cause the detonation but if it is too late there will be a powerloss and poor fuel economy.

Also, if the engine has a high compression it could cause detonation because the higher compression can cause the mixture to ignite prematurely, therefore, causing engine knock.

For instance, if you remove the cyl. head/heads from your car and have the surface milled down a substantial amount you will most likely need to retard the timing of the ignition because the compression in the engine will be greater thus it could cause engine knock.