Does XML covers the representation of any structured data and knowledge
XML is nothing more than a well-defined way to store trees of strings. Since even plain strings can encode everything you can encode in practice (i.e. countable sets), yes, XML can "model" everything. 

But that's nothing special.

The popularity of XML is probably due to


it being standardized and
the amount of tool support that has developed.


There is no information-theoretic miracle involved.