Rather than each pixel in the image having all three RGB colors (one 8-bit red, one 8-bit green and one 8-bit blue), each pixel contains one 8-bit number that indexes into the 256-color lookup ...

With RGB signals, where an 8-bit color map of up to 256 different colors can be chosen for each of the three–red, green, and blue, respectively—there are 16.8 million color choices.