I know that Knapsack is NP-complete while it can be solved by DP. They say that the DP solution is pseudo-polynomial, since it is exponential in th
The way I understand this is that the capacity would've been O(W) if the capacity input were an array of [1,2,...,W], which has a size of W. But the capacity input is not an array of numbers, it's instead a single integer. The time complexity is about the relationship to the size of input. The size of an integer is NOT the value of the integer, but the number of bits representing it. We do later convert this integer W into an array [1,2,...,W] in the algorithm, leading people into mistakenly thinking W is the size, but this array is not the input, the integer itself is.
Think of input as "an array of stuff", and the size as "how many stuff in the array". The item input is actually an array of n items in the array so size=n. The capacity input is NOT an array of W numbers in it, but a single integer, represented by an array of log(W) bits. Increase the size of it by 1 (adding 1 meaningful bit), W doubles so run time doubles, hence the exponential time complexity.