Some monsters have special attacks that are so strong they knock your character backwards, sliding you back a little bit (or quite far away in the case of some mobs). In addition to moving you backwards, these attacks interrupt spells and ranged attacks and often deal significant damage.
The Knockback effect will not move a character backwards if it is completely absorbed by shadows. A resting character that takes 0 points of damage from a Knockback special move (due to a buff such as Stoneskin) will be moved along the ground but will not stand up and continue to rest. It is also possible to move your character forward to counter the knockback while casting, returning to the same position, resulting in no interruption of the spell.