Bit depth
How many steps each colour channel has: 8 bits give 256, 10 bits give 1,024.
See it in Pixel art editor. Pick the Game Boy palette: four shades, which is two bits for each pixel.
In plain words
Computers store each colour channel as a whole number with a fixed number of bits. More bits mean more steps between dark and light. With 8 bits a channel has 256 steps, which is what most pictures use. With too few steps, smooth skies show visible bands. HDR pictures use 10 bits or more so bright scenes stay smooth.