Good question. First you need to understand the difference between “a knit” and “a woven”. Knitted fabrics are knitted on huge knitting machines, and fabrics that are woven are woven on huge square weave looms. The processes are different and the effect of the fabrication is different. Knitted fabrics are always stretchy, and generally woven fabrics are not unless they have a percentage of lycra or elastine woven into them.
T-shirt fabric is a knitted fabric, and so is jersey, knitted triacetate, mesh, wool, wool blends, terry cloth, stretch velvet, crepe knits to name but a few. I refer to a knitted top as a top that is a step up from a T-shirt. It’s any styled top that’s made of a knitted fabric that’s NOT a T-shirt. The appearance of a knitted top is smarter and more sophisticated, but can still be casual if you dress it down that way.