I'm not exactly sure, but I think it has something to do with learning sight words.  There is a kit out there call Rainbow Words and works with the Open Court reading series.  Basically, students learn their sight words as they are put on the colors of a rainbow.  Below is a link to the product, but it looks easy enough to make yourself.

Sight words are those words most commonly found in text that usually can't be sounded out - ones you want children to recognize automatically.  There is the Dolch and Fry word lists.  (Links provide below.)

As for learning these words in preschool, I would hesitate pushing any child to learn them at this age.  The earliest these words are introduced is Kindergarten.  A preschooler's eyesight is still developing.

Hope that solves the mystery.