Dyes are one of many new items introduced in Blood and Wine. In accordance with what their name suggests, their only effect is to change the color of the elements of armor used by Geralt. One important piece of information is that the dyes can only be used on pieces of witcher gear. It is not possible to change the color of "normal" armor found throughout the game.
The dyes are available in many different colors. Interestingly, you can preview the armor's appearance in new colors before you apply the dye. Furthermore, dyes can be applied only to selected elements of the armor (e.g. only to the gauntlets), and you can use Dye Remover to undo the changes.
New dyes can be obtained in several ways. The least demanding method is to find them in containers or on bodies during the exploration (you can find them only in Toussaint). You might as well, however, purchase them from various merchants or make them on your own (they are treated as recipes).