Aganju:

The game rules on this website explains it correctly, but perhaps it can put more emphasis on the sequence of movement, since that is critical in understanding how the piece can be blocked.

The knight (a.k.a. horse, the more precise meaning of the Chinese word representing the piece) must first move orthogonally (i.e. vertically or horizontally) and then diagonally, in such a way that the destination is always two files or two ranks away from the starting point. The sequence of movement is critical, as stated above: it must first move orthogonally. So think of the horse as making two stops in one move - first to an orthogonal point, then to a diagonal point further away. If the first stop - the orthogonal point - is occupied by a piece of either side, then the horse can go no further in that direction.

I'm sure other posters' explanations have already clarified the matter for you, but I thought I'd give a more detailed explanation for anyone who is still having trouble with this rule.