Dithering is a process in computer graphics used to create the illusion of depth and color variation in images with limited color palettes. It involves scattering pixels of different colors together to simulate a greater range of tones and shades than the actual palette offers. This technique can help prevent color banding in gradients and improve the overall appearance of an image, especially in cases where color choices are restricted, such as in GIFs or retro-style graphics. Dithering is a valuable tool in digital art and design, enabling more nuanced and detailed images even within technical constraints.