Head lice suck blood several times a day, during which they inject an anticoagulant saliva into the scalp.4 This triggers off the main symptom associated with head lice infestation, i.e. persistent itching.
After initial infestation, it can often take up to several weeks for the immunologic reaction to appear. First of all, red papules become visible on the scalp, which may be followed by nettle-like reactions. Itching increases with the number of bites.
Scratching the bites may allow bacteria to enter, thereby making skin reactions even worse.
Reference
4. Heukelbach J, Wilcke T, Winter B, Feldmeier H. Epidemiology and morbidity of scabies and pediculosis capitis in resource-poor communities in Brazil. Br J Dermatol, 2005;153:150-156.