(1) An on-screen window that displays a group of icons/buttons that represent selections to choose from.  Palettes may be fixed or customizable.  Although it originated for color choices, the term evolved into generic usage.  In contrast to a menu, in which the selections are normally hidden, a palette is like a toolbar with options visible at all times.
(2) The available colors in the computer's hardware or graphics file formats.  See 
indexed color and 
color palette.
(3) An on-screen sample of available colors that may be selected by the user.  For example, in a graphics program, it is used for selecting colors to paint images or draw objects.  In a business application, the palette is used to select colors for fonts and backgrounds.