Do you know what a histogram is? Despite most consumer cameras and image applications showing us a histogram for our photos, not too many people understand how they work and why they are there. Most importantly, many overlook the fact that analyzing the histogram can help you take better photos. Isn’t that what matters?
Professional Photographer explains the ins and outs of the histogram and how it works. One thing I didn’t realize was that histograms can differ greatly depending on the color mode and bit-depth. But that’s why I’m not a professional. The article, although comprehensive, is a rather quick read and a worthwhile one.
The horizontal scale of the histogram measures exposure latitude, and the vertical scale measures quantity: it tells us how many pixels in the image have a specific luminosity value. While the horizontal scale is measured in absolute values (0 to 255) the vertical scale is effected by several factors: the color space, bit depth, and if you are shooting jpegs, the compression level.
Source: Professional Photographer