This quote comes from Act III, Scene 2 of the play. It is spoken by Puck.
What Puck means when he says this is that love drives women crazy. In ancient Roman mythology, Cupid could cause people to fall in love with one another. To be "knavish" is to be a trouble maker or a bad person in general. So Puck is saying that Cupid is bad because he makes the women go crazy (presumably by causing them to fall in love).
This is somewhat ironic, of course, because it is not Cupid who has made these women fall in love -- it is Puck himself and so he is the knavish one here.