Types of Palettes
There are three types of palettes in the OHRRPGCE.
Sprite palettes are associated with sprites. Each sprite can have its own sprite palette, or sprites can share their palettes. Sprite palettes are historically called "16 color palettes" but in the future they will be expanded to allow 256 colors. Each color in a sprite palette is an index into a master palette. Currently sprites can only index into the default master palette, but in the future it will be possible for them to reference any master palette.
The first color in each sprite palette is transparent, regardless of which master palette color it points to.
Master palettes have 256 colors. Historically there was only one master palette, but the OHRRPGCE currently has some limited support for multiple master palettes. Text, UI boxes, Maptiles, and Sprite Palettes currently all reference the default master palette. Backdrops are allowed to reference alternate master palettes. Fading commands operate on the master palette. A master palette is made up of references into the Global Palette's 24-bit RGB colorspace.
The Global Palette
The global palette is the entire 24-bit RGB colorspace of 16.7 million colors.