Found a website on susperstitions....this was the most interesting explanation I found.
Knock on Wood:
We knock on wood to keep something bad from happening when we think we might’ve jinxed ourselves. Why does wood have power over our fates? The druids, who lived in what’s now Great Britain (and built Stonehenge), worshipped trees, believing that spirits lived in all wood. Whenever the druids said something about good or bad fortune, they’d knock on the wood to perk up the spirits to work in their favor. So whether we want a good thing to keep going or want to stop a bad thing from happening, we can make our request to the wood spirits by rapping our knuckles on the nearest piece of wooden furniture.