Well, im sure I didnt use any bright colors, field green, an od type brown for the head camo, tan and panzer gray for the arm...
Anyhow, if you wana know the story, I'v told it before, ill put it quick for you. In the show, man had developed the technology to create colonies in space, for people to live (see overcrowing on earth). They used mobile suits (gundam is teh series name and the name of a specifc type) as construction vehichles. one colony cluster declared independance and war, and armed these construction vehichles with weapons and extra armor. They first used them for space superiority, before the introduction of mobile suits space battles were fought quite like napeolonic infantry tatics. Each side lines up and starts to volly. One of the first times mobile suits were used was to test them in space combats, utterly desimating the battleships that could not keep up with the speed and smaller profile. allowing them time to modify them for use in gravity then using them, ground vehichles of wierd scifi shape and make, and infantry, resembling wwii german infantry, invaded earth.
From there it was the basic principal if someone makes a new weapon to use against you, you just make a weapon better, which is what happened. The earth government made a protype called 'Gundam' which was superior. The pilot (origoinally, some later on do) do not sit in the head, but a cockpit in the chest. The head is just a housing for the main camera. As far as how they related to troops, when they were first introduced, they were in limited numbers on the earth, and were used as shock troops, and infantry support, quite like tanks. If you watch the series there is alot of stuff that is taken from wwii, just indifferent scales. Zeon basicly does a blitzkrieg on earth useing superior numbers and technology, and a unprepared enemy to take over (taking over most of the planet)
As far as the colors, the anime used bright colors for the prototype, but the majority of the mass produced grunts were done in simple schemes, earth used alot of tans and reds, zeon used alot of greens, blacks, and blues. If I had my dvds with me at workI could take some screenshots... alot of the time when you see the big bright colors, the specific people's custom units, like the red zaku, for example, alot of general units, in Zeta gundam for example, the Rick Dias was painted black with a little bit of red detailing, and it was praticly invisible in space. The green of the zakus in gundam and 08th ms team made them almost invisible in the jungles, except for the glow of the monoeye