Converting color images to grayscale involves reducing the image to shades of gray based on the luminance of the original colors. This is typically done by averaging the intensity of the red, green, and blue (RGB) channels or by using a weighted average where luminance is calculated using the formula: L = 0.299 * R + 0.587 * G + 0.114 * B. This process simplifies the image while maintaining its overall structure and details.