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Knickers can refer to several different types of clothing. In current usage in the UK, the term tends to mean panties or underwear. The expression “Don’t get your knickers in a twist” is a suggestion to remain calm, a state possibly not achieved if your underwear has bunched up or twisted. In the US you are more likely to hear this term associated with knickerbockers, a type of short or long pant that is baggy over the knee and may buckle (or be elasticized) just below the knee or ankle. This explanation will focus mainly on knickerbockers as knickers, and not on the UK use of the term in present day.
The term knickerbockers is an interesting one to trace. It was used by Washington Irving, who named a character Deidrich Knickerbocker in his work History of New York. In the work, Irving uses the character, a quaint man of Dutch descent, as the fictional author of the piece. The name Knickerbocker actually existed prior to Irving's invention, and Irving had a friend named Herman Knickerbocker. However, Irving’s History popularized knickerbocker as a term, and the term came to be associated with the baggy, buckled below the knee pants style worn by some of the Dutch immigrants.
The Dutch clearly weren’t the only ones wearing these short pants. They were frequently used as convenient short pants by athletes, and some knickers were used in military uniforms. Young boys, up until the mid-20th century might wear short pants until they reached a certain age. Graduating to long pants was a rite of passage for many boys as they hit their teens or pre-teens. The advantages of knickers for boys are sure to be seen by many parents. As boys grow, replacing pants is often expensive. Since short pants buckled at the knee and were baggy, they could be made a little longer and baggier, so boys would fit into the pants for much longer than is standard with long pants.
Modern knickers are most often seen in sporting events, especially in baseball. Baseball pants are now usually elasticized and fit below the knee, and they’re usually much less baggy than short pants of old. Other sports prefer longer pants; but both skiers and football players began by wearing knicker styles of pants, accompanied by long woolen socks.
Though men generally wore knickers, women had an equivalent style of clothing, bloomers or pantalets, which might be worn buckled below the knee under dresses. A few times, fashion trends have attempted to revive knickers as outerwear for women, but these fashions tend not to last long. Bloomers as outerwear did become popular for a time in the mid-19th century as a decent style of pants for women who wanted to participate in athletic activities that would be hindered by skirts. Another way you might have seen a woman wearing these short pants in public, in earlier days, was as part of bathing costumes.