Knightstown is considered a “town,” as defined by the Indiana Code. The town was incorporated and established in 1827.
According to Indiana statute, the voters of the town elect five town council members and a clerk-treasurer, each for a term of four years. Members of the town council and the clerk-treasurer must reside within the town limits. Two members of the council are selected annually by the council to serve as its president and vice president. The town council serves as the legislative branch of town government and the town council president is the town executive, while the clerk-treasurer serves as the town's fiscal officer and as an ex officio member of the town council who casts votes when necessary to break a tie among council members.
Members of the town's various boards and commissions are generally appointed either by the president of the town council, or by the entire council, as determined by state statute.