Press the E-key to talk to people. Use your mouse to kill the black knights. The game explains the rest. There is a person to talk to in every scene. All you have to do is hover over the black knights to kill them. Press the green flag first before pressing the space key. Tip: only talk to the people after you defeated all of the black knights.
Update: changed the knight color from gray to light blue. The Knight's Battle II. Out now!