His father, a former member of the Royal Navy, participated in the California Gold Rush and died in America, leaving Nicholson's mother in poverty.

He studied at Trinity College, Oxford, from 1867, initially reading classics before obtaining a third-class degree in Law and Modern History in 1871.

An international conference of librarians was held in London in 1877, largely through his work, leading with his help to the foundation of the Library Association of the United Kingdom.

[1] Bodley's Librarian (the head of the Bodleian Library at the University of Oxford), Henry Octavius Coxe, died in 1881.

He was a surprise choice, as the position had traditionally been held by scholar-librarians, but he had the support of Benjamin Jowett (Vice-Chancellor of the University from 1882 and Master of Balliol College) and others who thought that the Bodleian needed reform.

Nicholson instituted a number of reforms and improvements: he obtained further space for the library in the rooms of nearby buildings; he changed the system of cataloguing; more books were acquired; open access to some reference books in the Radcliffe Camera was introduced; and boys were employed to carry out some tasks, freeing up the time of the more experienced staff.

However, by this time, his struggles and hard work had affected his health: he was confirmed as suffering from heart disease in 1890, he had a breakdown in 1901, and collapsed in the street in 1907 on two occasions.

The reviewer commented that "animals, as sentient creatures, have some rights—i.e., that man may not kill or torture them needlessly without incurring some moral blame—no one nowadays would undertake to dispute.