Specifically a gay term, for a person masturbating.
Euphemism for masturbation, used in gay slang terms.
Can be derogatory, but is generally considered self humor or poking fun at the stereotyped perception of gay men.
Loose adaptation of how a person needs to manipulate the long knitting needle (referencing the shaft of the penis), to achieve the finished goods (referencing achieving ejaculation)
Self humor by the Gay community, as many assume gay males are effeminate, hence the reference to knitting, a more feminine past time than male.