IIRC (at least in Daimonin) the colour of a mob is determined by the difference in its level vs the player's level.
Grey (more than 5 levels below player),
Green (4-5 levels below player),
Blue (1-3 levels below player),
Yellow (same as player's level),
Orange (1-2 levels above player),
Red (3-5 levels above player),
Purple (5+ levels above player).
Don't quote me on the # of levels above/below a player the mob has to be for the colour; I don't remember the specifics but it's something along these lines.