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LED stands for "light emitting diode".

An LED that is capable of emitting more than one color is actually composed of more than one diode.

For example, since diodes only transmit electricity in one direction, it's possible to make a green/orange/red LED with only two leads by connecting a red and green emitting diode to both leads, but "pointing" in opposite ways. When DC current is applied in one direction, the red diode emits red light. When it's applied in the opposite direction, the green diode emits green light. When AC current is applied, both diodes emit light part of the time; if the AC alternates quickly enough, your eye blends the red and green and you perceive it as orange (or amber, or yellow, depending on the relative strength of the light sources).

Alternatively, you can make an LED with three diodes (red, green, blue) with distinct leads (one side can be shared, if you want to minimize the number of leads) and depending on the percentage of time voltage is applied to each lead, the diode will appear to emit just about any color you want.

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Q: How does an LED emits different colours?
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