Knickers are underwear, especially women's underpants. Your little cousin's favorite knickers might be her blue and red Wonder Woman knickers.
Knickers, meaning underpants, is primarily a British term, although Americans will usually know what you mean if you use it. In the US, the primary, if outdated, meaning of knickers is "short pants." These old fashioned trousers, also known as knickerbockers or "breeches," were loose and knee-length, and worn by men and boys. Golfers and skiers commonly wore knickers in the early 20th century.