[caspar]

> Dithering means fading away the banding that occurs when the palette (or the apparent palette achieved via halftone) isn't large enough to avoid banding on its own.

Here[0] is a good summary of dithering/noise to reduce color banding. Interestingly, for my game[1] I found that Valve's animated dithering technique (which uses variation over time in lieu of a fixed noise pattern) worked best, as the other techniques described there altered the perceived lightness of the resulting image.

[0]: https://blog.frost.kiwi/GLSL-noise-and-radial-gradient/

[1]: A multiplayer Noita-like (more at https://slowrush.dev), where the radiance-cascades-powered lighting tends to cause obvious banding patterns on really dark backgrounds.