The mknod command creates device special files or fifos.
mknod was originally used to create the character and block devices that populate /dev/. Nowadays software like udev automatically creates and removes device nodes on the virtual filesystem when the corresponding hardware is detected by the kernel, but originally /dev was just a directory in / that was populated during install.
So yes, in case of a near complete disaster causing the /dev virtual filesystem not to load and/or udev failing spectacularly, using mknod to painstakingly repopulate at least a rudimentary device tree to get something back up can be done... But yeah, that's sysadmin horror story time. Personally, I recommend a rescue USB stick or CD.
Aside from creating named pipes, I can't think of a single possible day-to-day use for it that an end user would need to concern themselves with -- and even that is stretching the definition of 'day to day use'.
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