I suspect that HoBzY's confusion stems from the name nBits.

The term comes from the name of the variable in the code and it does not stand for "number of bits".

Satoshi used a (mostly deprecated) variable naming scheme invented at Microsoft called Hungarian Notation. In this scheme, the name is prefixed by a symbol that represents the variable's type. In the case of nBits, the prefix is n, which says that the variable is an integer.

So, the name nBits indicates that it represents bits in the form of an integer. A very poorly named variable in my opinion, since bits says nothing about what the variable contains.