It's a herb made from a plant. Some cats are receptive to it and act like on drugs (really happy, really friendly), some are not affected by it at all. Some dogs love it too!
It is part of the mint family and good in borders for repelling insects. Unfortunately, some cats rather like it and if you are unlucky, you will find your plant squashed, where the cats have rolled on it.
My old boy loved it and would go really silly. My girls aren't interested at all. The youngster had some catnip bubbles for christmas, I think I had more fun with them than she did!