Nits are the hatched eggs that lice come from. Head lice are a common problem, but are now easily treatable. Lice bite the scalp of their host and live on the blood. Generally, this only causes itching and discomfort but can also lead to rashes. Before there were very effective treatments for lice, and for the removal of nits, people would remain infested with lice for a long time. The only treatment available was to shave the head. Occasionally, lice would live for so long on a host that some of the bites would begin to get infected. This infection, coupled with poor medical treatment, could lead to death, although this was extremely rare.
Source: V.A. Little 1957. General and Applied Entomology 164-171