The color mode determines the color palette of an image. There are black-and-white images (1 bit depth), greyscale images (8 bit depth) and color images (24 bit or higher depth).
Black-and-white images exclusively contain black and white pixels. Black-and-white images are also called bilevel and lineart images. They can use black-and-white patterns to simulate shades of grey (“dithering”).
Greyscale images contain shades of grey. A range of 256 grey levels from white to black is used to compose the image.
Color images consist of pixels with different mixtures of red, green, and blue. Each mixture represents a different color. As there are 8 (or more) bits per pixel for the red, green, and blue “channel”, you get a color range of 16.7 (or more) million colors (“true” colors).