When I opened my shop 3 years ago, Etsy didn't have the variation options, so I created a color palette image and asked my customers to list the colors they wanted in the "notes to seller" when ordering. When the variation option became available I added the variation and listed custom colors based on my existing palette.
Now I am considering updating my color palette and am wondering if I should simplify it include more common colors if variations play a role in search relevancy. For example, if someone searches for "blue world map" do listings with a color variation that includes blue show up or does blue have to be in the title or tags? I guess the same question could apply to size options. I have listed my available sizes in the title and tags before, but if the size variation works as well, then I could change those.
Let me know if that doesn't make sense.
Preston