Color Depth

Color Depth refers to the number that a given pixel is assigned in a photograph. The number that a pixel is assigned determines the color of the pixel. Color depth can render 16 million different colors (about as many as the human eye can discern) in a picture based on a 24 bit per pixel measurement. Simply speaking, color depth describes the range of colors a photograph could possibly have. Color depth is a term that is used in both photography and computer arenas.
Color depth is also referred to as pixel-depth, bit-depth or true color. Ultimately, the color depth determines the richness of, or the degree to which, a color appears on a photograph. Color depth works by attributing a single color to each pixel. In sum total, a picture comes together because each pixel is assigned a distinct color depth.
However, color depth alone doesn’t determine the quality of a photograph. Color depth along with the dots per inch (DPI) are responsible for photographic quality. The higher the DPI (the more dots or pixels that make up an image), the more color depth numbers are assigned. Consequently, with more colors in an image, the more refined and detailed a picture will appear.
source:phiotography.com