When making a quilt, the top layer of fabric - the layer that has the pattern, the side that is visible when it is on the bed - is the first of three layers that are joined together to make the quilt. Below that top layer is the batting, the layer that gives the quilt most of its warmth; below that is the backing, usually a plain colored fabric. These three layers need to be sewn together in some way so they don't become unevenly distributed. The two methods that can be used to join the layers are to "knot" or to "quilt."
When a quilt is "knotted," a length of thread or yarn is pushed from the top through all three layers and back again to the top quite close together, then the ends of the length are knotted at that point. More pieces of thread or yarn are used at other points throughout the surface to join the layers.
When a quilt is "quilted," running stitches are sewn throughout the surface of the quilt, penetrating all three layers and joining them together in patterns that can be straightforward or very decorative.