The word squat has several meanings:

1. To crouch down low by bending your knees deeply while keeping your feet flat on the ground. When you squat to pick up something heavy, you lower your whole body instead of just bending over. Baseball catchers spend entire games in a squat position behind home plate. Squatting is also a common exercise: people do squats in the gym to strengthen their legs by repeatedly lowering and raising their bodies.
2. To occupy a building or land without permission or legal right. When someone squats in an abandoned house, they live there even though they don't own it or pay rent. A person who does this is called a squatter. In the 1800s American West, settlers sometimes became squatters by farming unclaimed land, hoping to eventually gain legal ownership.
3. Something short and thick in shape. A squat little teapot sits low and wide. A squat building might be only two stories tall but very broad.

The phrase “diddly-squat” means nothing at all. If you study hard but learn diddly-squat, you learned absolutely nothing. If someone knows squat about a topic, they know nothing about it.