The Book of Knowledge is actually writings which contains written predictions and prophecies. It was made by Barkus' father.
According to a prophecy written there, there will be a diwata that will bare a child who will become the Queen of Encantadia who is said to be the cause of Etheria's downfall. Another prophecy there states that the Queen's (adopted) child will also become a Queen. It can also forecast the result of the war. Barkus had no intention to join the war until the writings forecasted that the army of Meno will retreat and Etheria will declare victory.
It is also a book with methods of Bathalumang Ether's fightingstyles. When activated, it will display a hologram of a Hera Sensa soldier demonstrating fighting movements.
It also gives warnings, such as when it told Barkus that the Ginintuang Orasan is in trouble.