It means giving too much attention to small, unimportant details. Nits are minor flaws or shortcomings (nits are also the eggs of insects). "I see you are missing two commas in the hundred pages that I read." "Oh, don't be so nitpicky!"

A derogatory way to say that someone pays too much attention to small and insignificant details.

To be overly critical, esp. on trivial matters; focused on only trivial aspects

It means to be pedantic.

The British use "pernickety". In the U.S. it would be "persnickety". I have no idea why we yanks added the 's'.