This tool is designed to intelligently weigh the pixel colors of the selection or active layer and reduce the number of colors while maintaining a semblance of the original image characteristics.
Here, „level“ means „number of colors per channel “.
This slider and the input boxes with arrow-heads allow you to set the number of levels (2-256) in each RGB channel that the tool will use to describe the active layer. The maximum total number of colors is the combination of these levels. A level to 3 will give 33 = 27 colors.
The Preview checkbox enables the rendering of changes right on the canvas for immediate evaluation.