You threw the knife as close to the outer edge of your foot as possible, and then moved your stance wider, so that the knife was then on the inside of the foot. In this way, your stance got wider and wider, until on player couldn't move their feet wide enough to continue. Also, your opponent had to reach the knife and pull it from the ground in order to start their turn. Falling over also constituted losing the game. Are we talking about the same game?

We called it whitley-peg, and we played it with shovels in the boy scouts in the mid-to-late 1990s to avoid being caught doing such nonsense with a knife (and getting our totin' chip torn up by a responsible adult).