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Gamma refers to the brightness of a monitor or computer display. It is a setting that determines how bright the output of the display will be. Therefore, gamma correction is used to alter the output levels of a monitor.
While the gamma setting affects the brightness of a display, it is not identical to the brightness. This is because gamma adjustments are not linear, like brightness levels are. Instead, the gamma setting applies a function to the input levels, which produces the final output level. You can visualize this function as a curved line instead of a straight one. This means the extreme dark and light points are not as affected as the midtones, which are enhanced more because of the non-linear function. Therefore, the gamma setting affects both the brightness and the contrast of the display.
The reason gamma correction is used is because the input signal, or voltage, sent to a monitor is not high enough to create a bright image. Therefore, if the gamma is not altered, the images on your screen would be dark and difficult to see. By applying gamma correction, the brightness and contrast of the display are enhanced, making the images appear brighter and more natural looking.
NOTE: Common gamma settings are 2.2 for PC monitors and 1.8 for Macintosh monitors. These gamma settings apply an inverse luminance curve to the displays native gamma, which produces natural brightness and contrast levels.