A chameleon has the ability to change the pigmentation of its skin to either blend into it's background or to communicate with other chameleons. The possiblities of color combinations that the lizard can change into is limitless, just like Calvino's analogy of multiplicity.
He believes that literature is constantly attempting to recognize, analyze, and represent multiplicity and to determine an ending when in reality, the possiblities are endless. There are so many facets to multiplicity that it's impossible to explain the complexity. While a chameleon may just be a simple little lizard (just like us), it has the potential to create the rainbow of its choosing.