There is no such thing as a pure white light source.
Sunlight or daylight is bluish, shade is even bluer, and fluorescent light tends toward green.
White balance is a setting that matches the camera's sensitivity to the available light source.
In a fully automatic mode or auto white balance; the camera makes a correction just like it does with exposure. It usually gets pretty good results, but you can also set the camera manually to match your situation or to make artistic decisions about the color of your images.
A wrong white balance will introduce a Color Cast where your colors are not well balanced with each other.
One particularly visible consequence is that white is not pure white but slightly yellow or blue instead.
Daylight White Balance
Color Cast
Auto – The Auto setting helps in adjusting the white balance automatically according to the different lighting conditions. The camera will analyze the light in the scene that you are shooting, and pick a setting for you.
Tungsten/Incandescent – This is your standard household light bulb, or studio hot lights, and it is often used while shooting indoors. The tungsten setting of the digital camera cools down the color temperature in photos.
Fluorescent – This mode is used for getting brighter and warmer shots while compensating for cool shade of fluorescent light.
Daylight – This is for a bright sunny day, hardly any clouds, with a blue sky, and you are shooting in direct sunlight.
Cloudy – Shooting on a day when the sky is white with cloud coverage – no blue sky is coming through, the light is very neutral so you don’t need to counteract any blue light contamination.
Flash – The flash mode is required when there is inadequate lighting available. This mode helps pick the right White Balance under low light conditions.
Shade – When you are taking a picture in the shade, no direct sun, and the sky is blue. This blue sky is actually color contaminating your shot. This setting will “warm” up your shot to counteract the blue light that is coming into your scene.