For every pixel, there are a limited number of colors that you can use. Changing the color depth will change the amount of colors that can be used. There is a trade-off, though. The higher you raise the bit depth, the slower your computer will become. You will not see much of a difference when going to higher color depths, so the default of 8-bit is usually okay.
The total amount of colors that are available is related to the color channels. If you are using the RGB color model, you will have three channels: one for red, one for green, and one for blue. The amount of colors in each channel is determined by the color depth.
Say we have an RGB document that is set to 8-bit. The 8-bit is describing how many colors each channel has. 8-bit is the same as saying 28, or 256, values. The red, green, and blue channels will each have 256 available colors. Each pixel then has a choice of 16.7 million (2563) colors. These are the different color depths that are available:
The floating bit depths are used for HDR painting. The values are stored differently. Instead of a 0-255 range, the normal range is 0-1. The advantage of the floating format is that they can include values higher than 1. If you would have a value of 10, this would mean that the value would be ten times higher than white. It is similar to changing the exposure on a camera.