Deities could show their powers through major manifestations and minor manifestations. A favored color fell into the latter category.
Most deities had some kind of color as their favored color. It was considered a minor and subtle manifestation but it was also the most frequent. For example, Silvanus could turn a tree brilliant green to inform a fugitive follower of a good escape route.
Followers of a particular deity often dressed in the favored color, particularly the clerics. For example, some Vhaeraunite drow took their devotion too far and blew their cover by wearing black clothes.