Twists or produces a knot (7)
I believe the answer is:
windsor
'a knot' is the definition.
(Windsor knot is an example)
'twists or' is the wordplay.
'twists' becomes 'winds' ('wind' can be a synonym of 'twist').
'winds'+'or'='WINDSOR'
'produces' is the link.
(Other definitions for windsor that I've seen before include "Weekend residence of the British royal family" , "Queen's Berkshire residence" , "Royal house (or castle)" , "Noble family" , "Royal palace" .)