What is the difference between "knickers" and "panties"?

Solution 1:

That's what I've always assumed. Wikipedia seems to agree:

In British English, and in places such as the UK, Ireland, South Africa, India, and occasionally in other Commonwealth nations such as Australia and New Zealand, panties are often referred to as knickers. The term knickers is not generally used in the US and Canada, where the term "panties" is usually favored. In the UK, pants is also used, but can mean men's or women's underwear. This should not be confused with the North American usage of pants which are called trousers in the UK.

Solution 2:

As well as the UK/US divide, there's the matter of collocation. We speak of panty liners and not knicker liners, while on the other hand we speak of knicker elastic and not panty elastic.

Solution 3:

Panties are used by advertisers in the U.S. to sell women's underwear. Women don't call their underwear panties.

Knickers is a British term for underpants..unless used to refer to old fashioned style clothing that went down to your knees.