This phrase is casual and might be inappropriate in formal or serious situations. At the family dinner, my uncle told me not to get my knickers in a twist over the burnt turkey.
Pro Tip 2/3
British Origin
It's a British phrase, so it's more recognizable and acceptable in the UK than other English-speaking regions. When I studied in London, I often heard people say 'Don't get your knickers in a twist.'
Pro Tip 3/3
Mild Ridicule
The phrase can express mild mockery, suggesting that someone's reaction is unreasonable. She's always getting her knickers in a twist over minor delays.