The colored dots show you where to place your left hand fingers. There are three basic types of chords - major (shown as red dots), minor (purple dots) and dominant (green dots). The white number tells you which finger to place on the string just before the fret. If there is no dot on a string, you play it as an open (not fretted) string. The other chord diagram symbols used in this book are summarized in the following two diagrams.
A dotted string indicates that the string is not to be strummed. A small bar connecting two black dots indicates they are held down by the same finger. This is called barring.
An X on the string indicates that string is to be dampened by another finger lightly touching it. The string is still strummed as a part of the chord but it is not heard.