During editing the computer will remove all the pixels above a certain green-ness threshold and replace them with whatever CGI background you want to use.

This rapidly automates the film editing process so that a human doesn’t have to manually crop each frame.

You can theoretically use any color value for this, but green is the most common because humans don’t come in green and don’t wear green very often.

Choose red or yellow and you risk editing out a person standing in slightly off lighting too. Choose blue and you’ll edit out everyone’s pants.