The term 4096 refers to the Amiga's 12-bit color palette, which supports 4096 distinct color values (16 levels each for red, green, and blue components). While standard display modes were limited to 32 or 64 simultaneously visible colors, the HAM (Hold-And-Modify) mode could display all 4096 colors on screen at once by allowing pixels to modify individual RGB components. This capability provided unprecedented color fidelity for 1985 computer graphics, enabling photorealistic imagery and smooth gradients essential for desktop video and graphic design.