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Highlights are small sections of hair that are lighter than the base colour (which could be your natural hair color). More often than not, the color of your highlights will be a lighter shade of your base color. So someone with dark brown hair could get light brown highlights, golden blonde highlights would complement deep honey blonde hair, and so on.
When it comes to technique, highlights are done with the help of aluminum foils. The hair dye is applied to small sections of hair from the roots to tips and covered with aluminum foils that trap in heat and lighten your hair more intensely. The size, placement, and tone of the highlights can be planned out precisely when it comes to deciding the hair look you are going for.
Step by step: