The story is that Henry V111 declared that the loin of steak served at a banquet was so magnificent that it deserved to be knighted so he decreed that it should be known as "sir"loin.
"Story" is the word, and a Very Silly one too. From French 'surlonge', the cut above the loin. Story probably started off as a silly pun, also attributed to James I, but taken up by amateur guides at various stately homes where the incident is said to have occurred...