As we know a slider on a traditional lighting desk will either show it's position as a percentage or as a value. If it is showing it as a value you will notice that it goes from 0 (zero) to 255, that is 256 steps. When the designers where coming up with DMX512 protocol it was only being used to control the dimmer of a light and they thought that 256 steps of dimming control was enough as you could not actually see the difference from one value to it's neighbouring value.
DMX512 uses a serial transmission to send data out and one byte of data (8 bits) has a maximum value of 256. DMX values for any given channel are in the range of 0 (zero) to 255. These values can be defined in eights bits. Bits are binary numbers, like dipswitches, and are either 0's (off) or 1's (on). It is not necessary for you to fully understand binary to understand how 8 bit and 16 bit fixtures work.
8 bit and 16 bit in refererence to intelligent light fixtures and DMX is the accuracy of control over the movement functions of these lighting fixtures.
Using 8 bits will mean that the movement function of a fixture can have 256 steps (0-255).
If a moving head only had an 8 bit pan (rotate) channel and could rotate a maximum of 360 degrees that would equal 1.4 degrees for every step. Not very accurate. We know most moving heads can rotate around 540 degrees and that equates to 2.1 degrees for every step, that is even worse.
Using 16 bits will mean that the movement function of a fixture can have 65536 steps.
This is acheived by using two channels per movement. 256 * 256 = 65536.
This is sometimes refered to as course (1st channel) and fine (2nd channel) movement. What this means for every step (DMX value) in the course channel it will have 256 steps (DMX values) in the fine channel. This allows very accurate positioning of scanners, moving heads and other lighting fixtures that have some form of movement control.