Well, as I've seen... the fakes are completely different. They barely ever even attempt to give it anything that smells at all like it. This includes dangerous chemicals sometimes, so Fakes are the worst.
Knockoffs are just fragrances that are supposed to smell like the original. Typically they don't smell much like the original to me, but they're not nearly as bad as fakes because they actually DO contain aromatics and essential oils and such... just in different quantities or different than the originals.
Watered down is kind of like EdC, EdT, EdP, or Pure Perfume. EdC's watered down from EdT, EdT from EdP, EdP from Pure Perfume, and Pure Perfume isn't.
Hope I helped.