Well defined images span an entire range of color intensities.
However it is common to find images that do not. If a photo has
been overexposed it will be too bright - there will be few colors
at the low ends of intensity and many at the high end. Similarly if
a photograph has been underexposed it will be very dark - all the
colors will be at the low end of the range and virtually none at
the high end.
The AutoLevels effect detects and fixes this kind of imbalance.
It scans through the levels of intensity within the image and
chooses a level that should be regarded as black (low intensity)
and another that should be regarded as white (high intensity). It
then stretches the levels in the image so that all the intensities
present lie between the black and the white points. This results in
an image with a good span of color intensities.
To mitigate the effect of outliers - small numbers of pixels at
extreme values of intensity - a clipping percentage is used. By
default the value is 0.5% which means that the bottom and top 0.5%
of pixels will be ignored when determining the black and white