An RGB LED is an LED that can light up either red, green, or blue.
The type of RGB LED a common cathode RGB LED. This is an LED in which all the grounds of the LEDs are tied together common.
Depending on which anode gets +3V determines which color the LED lights as.
If you need multiple colors to be shown and if you have very limited space on a board (where you can’t fit 3 separate LEDs), an RGB LED works perfectly.