Nit is a slur used to describe Native americans in a derogatory way. Chivington ordered him men: "kill and scalp all, big and little; nits make lice" just before the Sand Creek massacre in 1864. This was an explination as to why troops were ordered to kill Indian children.
The word Nit is a racial slur that has been used historically to degrade and dehumanize native americans. The word is still used by some people for this purpose, and it is seen as offensive and hurtful to native americans. If you are unsure about whether or not it is appropriate to use the word Nit, it is best to err on the side of caution and avoid using it in any situation.