Another definition of "smart" is the accumulation of knowledge and facts.
The 2nd definition is what the BBC headline and James Flynn is talking about. He's concerned we're not "smarter" in the sense of not reading more books, and not knowing about history like The 30 Years War, etc. In contrast, when another writer like Joel Spolsky talks about "Smart and Gets Things Done"[1], he's emphasizing the 1st definition (aptitude).
So yes, IQ and knowledge are decoupled from each other and can increase at different rates. E.g. there are a lot of high-IQ physicists out there that can solve crazy equations but are not interested in reading a bunch of history books. In JF's framework, this makes those scientists "dumber".
[1]http://www.joelonsoftware.com/articles/GuerrillaInterviewing...