The dragon knights are humans that work for the dragons, and were given the ability to transform into a dragon. The dragon knights are wyverns, but wyverns are not necessarily dragon knights (and apart from being dragon-like with wings and two legs, the form your character takes looks fairly different than the enemy wyverns). Given the scarcity of dragons, I doubt there will be more than a handful of dragon knights in the game, unless they have some secret stronghold somewhere.
Larian may have also considered the 'always flying' status when determining the form for the dragon. IIRC this was first brought up by someone after a few screenshots were released, and Lar replied that the wyvern style was done deliberately (see
Why oh Why?).
The wyverns in the game are reptilian, so I would guess your avatar is from a different creature.
