Translation according to P. W. Joyce:
Knockavallig in Kerry; Cnoc-cf-bhealaig, of the road or pass : with the Munster restored g. Else-where it would be Knockavally as in Knockavally in Kilkenny. But Knockavally in Galway is different (as is easily found by local pronunciation), Cnoc-a'-bhaile, hill of the bally or town. See Bally [reproduced below].
Bally (Irish baile, two syll.) forms a part of a vast number of place-names all through Ireland. Primarily it means a place, a spot; then a homestead or residence; then a town (including the homestead of the chief with the houses of the dependants); and lastly a townland (the land belonging to the homestead, whether the homestead remains or not). I have nearly always rendered it "town" or "townland", which is in accordance with the almost universal custom of the people in every part of Ireland; but the other and extended meanings must be borne in mind for each case. Remark: when Bally, in these senses, begins place-names, the rest of the names in the great majority of cases are family or personal names - the families or individuals to whom the several homesteads or townlands belonged. All this will be illustrated in the numerous names following. But the anglicised form Bally is often incorrectly made to stand for other Irish originals. One is Beal-atha [Beal-aha], the mouth or entrance of a ford or a river-ford simply. Another is Baile-atha [Bally-aha], the town of the ford, ford-town. Worst of all it sometimes represents Buaile or Booley, a milking-place or dairy-place for cattle. Many instances of these perversions will be found all through this book. The pronunciation of the name by a native Irish speaker almost always reveals the true original form, and through that the meaning. I suspect that baile is or was neuter, from its influence in eclipsing and aspirating.