There are a bunch of different orders you can get knighted in, the British Empire is just one of them, for example the fictional James Bond has a CMG, (Companion of the Most Distinguished Order of St Michael and St George), and the actor Daniel Craig who played him also has a CMG, although unlike Bond he has not turned down a KCMG (Bond turns down the knighthood because it makes you more of a public figure which is undesirable for an active secret agent whereas it's no problem for an actor).

The Order of St Michael & St George is also famous because it's how the "Yes, Minister" joke works: CMG stands for "Call Me God". And KCMG for "Kindly Call Me God" / What does GCMG stand for? / "God Calls Me God".

She was not yet "forced" to give it up, although that is likely the end result. These honours are notionally bestowed by the Monarch (so these days, Charlie) under advice, so a committee will decide that yup, Paula clearly shouldn't have this honour, take it away, and Charlie will sign the appropriate paperwork. What she's done so far is write asking that it be taken away, which is almost nothing.