What does ASH mean by 'indexed palette'?

[vintagejordan]

Definion please.
Im modding sonic but i keep getting a crappy 'include, yes or no' error about an non-indexed palette and if i put yes and test it out, the game freezes.
Im new to all this btw

Thanks in Advance.

[picano]

Index it!

EX: Gifs are an indexed file format, allowing a max of 256 colors. Colors are applied via a limited "palette" of colors and a "paint by number" system.

GIMP / Photoshop: Image > Mode > Indexed

Paint.Net user? You'll need to use resave the file in some other program in order to index.