Have you ever seen a rainbow? Why do you think so many different colours join together to produce such a pretty sight? Rainbows are actually a byproduct of a phenomenon called light (or chromatic, for the colours) dispersion. You may have already seen this same effect on a prism whereby white light enters the prism, and light of different colours exits the prism. An easy way to understand this phenomenon is to remember that light is simply traveling energy in the form of electromagnetic radiation. Different types of EM travel at different frequencies. Light too, can travel at different frequencies, the frequency of light, in turn, determines the colour that it appears to be. White light is, in fact, a combination of all the colours that are part of the visible spectrum.
As you can see from the diagram above, visible light only consists of a small fraction of the electromagnetic spectrum. It is the only kind of electromagnetic radiation that we can see with the naked eye. Violet corresponds to visible light traveling at the highest visible frequency, while red corresponds to visible light traveling at the lowest possible frequency. Dispersion corresponds to the phenomenon whereby white light (a combination of all different light colours) is separated into its different components as a result of entering a dense medium. In the case of rainbows, light becomes dispersed as it passes trough water droplets present in the atmosphere (which is why they can be commonly seen after it has rained). In the case of prisms, light is dispersed because of the shape of the object; because the prism changes in length along its height, light takes longer to cross the prism at different points, making it split up into light at different frequencies upon exit.
Chromatic dispersion must be taken into consideration when working with telecommunications, because light may change frequencies as it bounces off the internal sides of fiber-optic cables, resulting in the loss of information.