Results just published on March 4, 2021, in Current Biology now explain why catnip works as a powerful mosquito repellent. Researchers from Northwestern University and Lund University explored the mechanisms by which catnip and its active ingredient, 
Nepetalactone, successfully ward off a wide array of insects.
Simply put, a catnip metabolite functions as a powerful natural insect repellent because it activates an insect receptor, TRPA1, that is triggered by noxious and irritating chemicals. No wonder it creates a significant aversive effect!
As a result, this may be an excellent target for next-generation repellents that exploit the same mosquito irritant receptor. Hopefully, new products based on this work will be safer and as effective (or more so) than current options.
Source: Press Release, Northwestern University https://news.northwestern.edu/stories/2021/03/catnip-insect-repellent/
Current Biology publication DOI: https://doi.org/10.1016/j.cub.2021.02.010