Choose "Action", "Treasure", or "Victory".
All other players discard a card from their hands simultaneously.
If most are …
Action Cards, +1 Buy;
Treasure Cards, +2 Coins;
Curse or Victory Cards, +2 Cards;
Not the Named Type, +1 Action.
Then each other player draws a card.
Clearly name one of the three card types to make this choice known to the other players.
The other players will discard a card simultaneously from their hands. They choose one of their cards in secret and then, when everyone is ready, they put their chosen card in their discard pile at the same time. They cannot confer with each other about their choices, beforehand.
The effects of this card depend on the proportions of card types among the cards discarded and whether they match the type you named. If there are more cards of one type than cards of any other type, that triggers a corresponding benefit for you: +1 Buy, +2 Coin, or +2 Cards. In addition, if most of the cards do not have the type you named, the final condition applies, giving you +1 Action. Combinations of these conditions are possible.
The specific names of the cards do not matter, just the types of the cards.
Here are several examples for a four player game (where having two or more cards sharing a type usually represents 'most'). Say you have named the type 'Action':
Or in these examples, in a three player game, where the card types tend to be more evenly split. Say you have chosen the type 'Treasure':
In a two player game, there is only one player's card to consider, so the possibilities are straight-forward: get the benefits of whatever type(s) their card has and check whether it was the type you chose.
Each other player then draws a card, restoring their hand to the size it was before.
If a player uses a defensive card, such as Moat, they do not discard a card nor draw one. In a two player game, if the opposing player uses such a defense, none of the conditions have any meaning, and you gain no bonuses from playing the Knight.