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It's also a very derogatory word in Ireland for a member of the travelling/gypsy community.

Who also used to be the knackermen back in the day, hence they became knows as the 'knackers'.

"Knackers yard" was a place to take horses for disposal, AIUI, and we'd - by extension - call a scrapyard (for cars) "the knackers yard".

We also use knackers and knackers yard in Ireland to refer to people who dispose of dead farm animals.