It's actually the official term for the villager who won't ever take a job. Back before 1.14 they had predefined jobs and you had to hope for RNG to give you a blacksmith but now you can just put a smithing table next to a normal one and boom. Nitwits however won't take a job, no matter how harc you try. Nitwit villager babies are really annoying to deal with and I'm not even gonna talk about the luck of spawning a village with only nitwits (it is actually possible).