The name comes from the fact that the disease was first identified on olives. And it can be a serious disease on olives causing severe crop loss. The causal microorganism is a bacterium which survives in the galls. The bacterium becomes active during spring rains and is moved about by wind-blown rain, insects, and possibly birds. The bacterium infects the host through leaf and flower scars and through wounds.
To control olive knot, prune all diseased tissues out of the bush. Then spray the bush with a registered fungicide. The process of pruning and spraying may have to occur several times over several seasons before the bacterial inoculum is eliminated. If your neighbor has the problem and does not follow the same therapy program, the problem may never go away.