How is the knowledge graph built ?

[seoanalytics]

In other words how does google know which entities are the closest to each other ?

Thank you,

[NgEF]

Sounds like you're talking about optimization for Local Search! 
Here's a resource I used to help educate myself on local search optimization in the past:

https://neilpatel.com/blog/definitive-guide-local-seo/

Hope it helps!