This sensor detects the three primaries (RGB) and "white" to calculate absolute and relative color values.
The detection speed is quite fast, several times a second. But you'll need to linearly calibrate your detector to get a "reality-correct" result.
Fortunately the sensor curve is calibrated at the factory!
It comes with a quick and easy "Getting started" Arduino IDE .ino sketch so you can just plug it in and try it out.
There's MANY documents online for this sensor if you want to plunge into the depths of its workings and features. It's a popular and well recognised item.
ONE limitation you should be aware of: The two cool white LED's are wired directly to the Grove plugs power. This means you wont be able to turn these two white LED's off, in order to analyse colors produced by LED's/screens or anything else that emits its own light.
It's a great little product!