Palette
Also said as Colour palette, Limited palette, Swatches
The fixed set of colours a game, a level or a character is allowed to use. Old hardware forced a small one; artists now often choose one anyway.
Fewer colours make everything agree with everything else. A limited palette is one of the cheapest ways to make a small team's art look intended.
Say it
“Limit each level to 16 colours, with the same four shadow colours everywhere. Only the player and pickups may use the accent red.”
Where you’ve seen it
A Super Mario Bros. sprite gets three colours plus transparency, the NES limit per sprite palette. Downwell chooses a similar limit by default: black, white and red.
Not to be confused with colour grading
A palette is chosen before you draw and limits what you can draw with. Grading is applied over the finished picture and shifts what is already there.