etc) when referring to video game graphics?

From Wikipedia:"A bit refers to a digit in the binary numeral system (base 2). For example, the number 1001011 is 7 bits long. The unit is sometimes abbreviated to b (but see below).Binary digits are almost always used as the basic unit of information storage and communication in digital computing and digital information theory."

The above is the text book definition of bit.. however to answer your question in graphics.. you can view it as how many bits can represent a dot on the screen. 1 bit can support only one color per dot - monocrome. 4 bit is 16 colors, 8 bit is 256 colors, 32 bit millions of colors.

Back when such things really mattered, the reference to 8, 16, 32 and 64 bit referred to the number of bits the CPU can process in a single cycle. A 16-bit CPU would thus, in theory, be twice as powerful as an 8-bit CPU.