nit·pick·ing n Minute, trivial, unnecessary, and unjustified criticism or faultfinding.
What it really means is picking the eggs of lice out of someone's hair. Don't get squeamish. Head lice is an equal opportunity problem. It is not a sign of poor hygiene or lower income. Lice infest opportunistically. Scientists have found head lice on the scalps of Egyptian mummies. 25 million Americans will likely be infested this year. That's a whole lot of tiny insects to get rid of. Its easy to figure how "nit picking" moved into colloquial conversation to mean a micro-focused task. Not just "nit picking". "Lousy" is another common word derived from the human relationship with lice.
This is a great country. Across the USA entrepreneurs have opened lice treatment salons where both chemical and mechanical treatments are offered. Most popular (and successful) seems to be combing with a fine toothed steel comb - the kind you might use on your cat. Enjoy this proprietor's jingle: http://www.texaslicesquad.com/: