The colour of skin and hair is mainly due to the amount of brown melanin pigment mixed with blue (from reduced haemoglobin), red (from oxyhaemoglobin) and yellow (from carotenoids in the diet). The amount of melanin is determined by constitutional colour (white, brown or black skin) and skin phototype, i.e. the result of exposure to ultraviolet radiation (tanning).
Increase in melanin (hyperpigmentation or hypermelanosis) can be due to an increased number of pigment cells (melanocytes) or from increased production of melanin.
Reduction in melanin results in pale patches (hypopigmentation or hypomelanosis) or white patches (leucoderma). See DermNet's article on pigmentation disorders for more details.