Here the word palette refers to a range of colours or a colour scheme. You are correct though, as it is also the board that artists use to hold and mix paint.
The meaning of the word palette has extended beyond actual colours to include figurative colours. A musician can use a palette of tones and modes. Either way it refers to a selected number of things (colours, sounds etc) from all available options.
Ex: I choose a palette of natural, earthy colours.
Ex: He wants to decorate the living room using a palette of warm, bright colours.