Source : Free On-Line Dictionary of Computing

colour palette
     
         (colour look-up table, CLUT) A device
        which converts the {logical} colour numbers stored in each
        {pixel} of {video} memory into {physical} colours, normally
        represented as {RGB} triplets, that can be displayed on the
        {monitor}.  The palette is simply a block of fast {RAM} which
        is addressed by the logical colour and whose output is split
        into the red, green and blue levels which drive the actual
        display (e.g. {CRT}).
     
        The number of entries (logical colours) in the palette is the
        total number of colours which can appear on screen
        simultaneously.  The width of each entry determines the number
        of colours which the palette can be set to produce.
     
        A common example would be a palette of 256 colours
        (i.e. addressed by eight-bit pixel values) where each colour
        can be chosen from a total of 16.7 million colours (i.e. eight
        bits output for each of red, green and blue).
     
        Changes to the palette affect the whole screen at once and can
        be used to produce special effects which would be much slower
        to produce by updating pixels.
     
        (1997-06-03)