Knitting dolly (Strickpüppchen in German) is a tool to make thin knitted tubes.
The picture is the one I bought at the local craft shop with about 5 Euro. In Germany and Austria, there are also a child toy version of this one, made of woods with fancy paintings on them.
There are also small machines that can make similar knitted tubes called Knitting Mill (Strickmühle). Prym is one of the company who produces these machines.