This is very unusual and awkward for a Nicktoon as it features a small boy around Timmy's age being killed on screen (Arthur, when he was transformed into a muscular super hero, but he is brought back to life moments afterward).
This episode reveals that Dragons are immune to magic.
Strangely in one episode when Jorgen is reading Da Rules, he says it says no wishing someone back to life yet Timmy clearly wishes Arthur back to life though that rule may have been placed because of what happened in "That's Life!" (which occurs after this episode).
Bugs Bunny - The title, Knighty Knight, is an allusion to the cartoon, Knighty Knight Bugs.
Whenever Merlin uses his "magic", he throws magic dust on the ground but it only does a poof cloud and nothing else.
Merlin and Authur find a magical item, but Timmy takes it before they can, thinking it's something else.
The date of the Camelot Fair suggests it has been held annually for around 600 years. Longer than the discovery of America in 1492, let alone the founding of Dimmsdale in 1665. Also, the legend of King Arthur takes place in the late 5th and early 6th century.
Comcast's summary states that the dragon's master want to cast a spell on Cosmo, which never happened in the actual episode.