Dreams and visions about knitting tell you, as it were, about connecting situations, insights, knowledge, possibilities, life lessons and so on. Another explanation is that knitting refers to creativity, figuring out, trying, the ability to discover something new. It reflects the soul, the purity, the source, the base and/or there with which you have a connection.
Dreams in which you are knitting tell you a lot about the soul connections, the soul thread, your life thread from which all your energy flows. Every stitch is a connection with something or someone, these kinds of dreams indicate awareness of that fact. A spiritual explanation is that knitting reflects the energetic cord, you are adjusting, enlarging, decreasing, improving "dropping a stitch", letting people go, cutting unhealthy connections and so on,
Yet another explanation is the processing of old relationships, connections, past lives and old habits. See it through the eyes of your inner child, thinking out of the box. An alternative explanation is to reflect the feminine energy and nurturing masculine character traits. In addition to this, discovering your feminine and masculine basic skills, relaxation and finding a balance between work, obligations, yourself, the warmth of your soul, your family, your connections.