Several programs, such as those which read 2-D gridded data sets and create colored images or shaded reliefs, need to be told what colors to use and over what z-range each color applies. This is the purpose of the color palette table (cpt-file). These files may also be used by psxy and psxyz to plot color-filled symbols. For most applications, you will simply create a cpt-file using the tool makecpt which will take an existing color table and resample it to fit your chosen data range, or use grd2cpt to build a cpt-file based on the data distribution in a given grid file. However, in some situations you will need to make a cpt-file by hand or using text tools like awk or perl.
Color palette tables (CPT) comes in two flavors: (1) Those designed to work with categorical data (e.g., data where interpolation of values is undefined) and (2) those designed for regular, continuously-varying data.