The Known World covers the fictional aspects of your DW game/campaign setting. Its all the places the adventurers can find information about or travel to, albeit not always easily. All the races and creatures , landmarks, legends, treasures, steadings and political regimes discovered and collaboratively created through the fiction become part of the Known World. What the GM knows about the campaign world might sometimes be very different than what the players and/or their characters know, but all of that information can- and should be discovered by the adventurers over time.
Classic DW advocates GMs try to keep the Known World a tabla rosa or blank slate before game begins and let it build during character creation by asking the characters questions about it. This is an aspect of the agenda Play To FInd Out What Happens. Some GMs prefer to create their own setting, using the Make Maps But Leave Blanks principle instead.