There are different tape formats. This is the system which most domestic video recorders use. There is also Super VHS which is a high definition system giving better picture quality allowing copies to be made without significant loss of quality. In earlier days this had to be set manually but is now generally automatic. This is simply to adjust the cameras electronics to suit the lighting conditions, ie color temperature, in which the recording is to be made.
Outdoor light has a different quality to indoor lighting.
If you don't compensate you can get some very odd colors. So the balance is made via a white sensor which calibrates the camera for recording white as white irrespective of the ambient light. Camcorders are equipped with an automatic exposure system. In most situations exposure will be set correctly for a wide variety of lighting levels. But you do have to watch for bright areas in the picture - a bright sky or a bright window will force the system to darken the whole picture.