[dukope] was writing a game, Return of the Obra Dinn, with a fantastic visual style. One of the choices was to make everything in glorious one-bit color, otherwise known as black and white, and then ...

Yes, that's dithering. Gifs have only 256 colors, so in reducing from a larger palette, it tries to simulate the original color by using one that's close and making it look lighter or darker with dots ...