Source : Webster's Revised Unabridged Dictionary (1913)

Palette \Pal"ette\, n. [See {Pallet} a thin board.]
   1. (Paint.) A thin, oval or square board, or tablet, with a
      thumb hole at one end for holding it, on which a painter
      lays and mixes his pigments. [Written also {pallet}.]

   2. (Anc. Armor) One of the plates covering the points of
      junction at the bend of the shoulders and elbows.
      --Fairholt.

   3. (Mech.) A breastplate for a breast drill.

   {Palette knife}, a knife with a very flexible steel blade and
      no cutting edge, rounded at the end, used by painters to
      mix colors on the grinding slab or palette.

   {To set the palette} (Paint.), to lay upon it the required
      pigments in a certain order, according to the intended use
      of them in a picture. --Fairholt.

Source : WordNet®

palette knife
     n : a spatula used by artists for mixing or applying or scraping
         off oil paints