The Knights Templar were a Christian military order during the Middle Ages. The were highly involved in the Crusades, and were often responsible for the defense of Christian pilgrims who wished to visit the Holy Lands. It is believed that their name derives from the "Temple of Solomon."
The Templars were an influential and popular group for over two centuries. However, weakened by disputes with other Christian military orders as well as opposing countries and religious groups, their popularity began to decline. Jerusalem, the Christian Holy City, was captured by Muslim forces and the Templars were forced to uproot and find new locations for their headquarters.
In the year 1307, King Philip IV of France put forth an order for numerous members of the Knights Templar to be arrested (the charges included heresy, fraud, and a number of sins against God and Christianity). Many were burned at the stake for their supposed crimes.
Legends still surround tales of the Knights Templar; many state that they were in position of relics such as the Ark of the Covenant and/or the Holy Grail.
Some modern-day organizations link themselves to the Templar, including the Freemasons, the Sovereign Military Order of the Temple of Jerusalem, and various pseudo-chivalric orders (orders that are not recognized as being legitimate).
Carnivale introduces the idea of the Knights Templar via a vision experienced by protagonist Ben Hawkins. Upon encountering a fellow "freak-finder" (one who finds people with unique talents, deformities, or abilities for a carnival) by the name of Phineas Boffo, Ben shakes his hand, only to have a vision - fire, battle scenes, soldiers, bloodied and dismembered bodies - and realize it was caused by Boffo's signet ring.
Anyone who is familiar with the legends of the Templar would recognize the signet: a red cross upon a black and white background, inscribed with the words "in hoc signo vinces" ("in this sign you will conquer").
Those who are not so familiar with the legends, however, must wait for the show to explain its meaning and its significance.
Ben shows the ring to Samson, the manager of the carnival, who recognizes it as the same symbol shown on a medal he possesses, one that used to belong to a man named Henry Scudder - a man that both Ben and his nemesis, Brother Justin Crowe, have been dreaming about and consequently searching for. Their respective searches lead them to the Lodge of the Benevolent Order of Templar - a modern branch of the Knights Templar.
Carnivale was cancelled after the second season and therefore did not have a chance to expand on the Templar plot-line. However, in various internet chats with fans, show creator Daniel Knauf did explain some points: the Order was responsible for tracking down Avatars and offering help; Scudder had been a member of the Order; and a manuscript transcribed by Sauniere would come into play (presumably the one sought by Wilfred Talbot Smith that describes the roles of the Avatars, hidden at Rennes-le-Chateau - a place famed for its mythical relation to the Knights Templar).