It really is 16M, but you would be hard pressed to tell them all apart or select them from the color wheel. Each of the three primary colors can be set to anywhere from 0 to 255. So 256 x 256 x 256 is a little over 16M.
With some of the stuff I do, the lighting controls allow setting the 0 to 255 level so it is easier to get all 16M colors.