In our universe, there are two types of color.
First type is color that you can touch. Colors of pigments are such colors.

One characteristic of such type is that more colors you add, the result gets darker, and therefore it's also called "Subtractive Colors". Three primary colors are Red, Yellow, and Blue.

Second type is a non-touchable color. (Additive colors). Colors of light are such colors.

Unlike the subtractive colors, this type gets lighter when you add more colors, and therefore it's also called "Additive colors". Its primary color is Red, Green, and Blue (the term RGB came from this), and their combination yields entire visible spectrum of colors. Colors displayed in monitors are such type.

Have you ever wondered how the color bits are calculated? : What do they mean by 8-bit colors, 16-bit colors? What is millions of colors?

Well, originally there were only two colors (binary) in computer art. Off and on, which translate to Black and White. That is 1 bit color system.

21= 2.
So in this system, each pixel have 2 different color choices.

Then those two colors are subdivided into two sections each. That is 2-bit colors

22 = 2 x 2 = 4.

If you subdivide those colors 6 more times in the same manner, you get 8-bit colors.

28 = 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 = 256.
So there are total 256 possible colors for each pixel in an 8-bit image.

The following shows the same image in different bit depths.

Computer is essentially a colorblind. They can only understand things in gray scale. So how does computers display full range of colors then? The answer is in the term "additive color".
Essentially, computers use three different 8-bit grayscale images projected thru three different color channels and composite them into one full color image.

Since there are three 8-bit images, the result is a 24-bit image with possibility of more than 16.8 million colors for each pixel in the image.
28 x 28 x 28 = 224 = 16,777,216 colors
Because of such large spectrum of colors it can generate, 24-bit color is also called "true colors".
Today, there are even higher bit depth colors such as 32-bit and 48-bit, but for most CG purpose, 24-bit is currently the standard.

By the way, above was based on RGB color mode. Other modes have different color channels. For an example, CMYK will have four color channels (cyan, magenta, yellow, and black) instead of three.