Argh, I was just preparing to write a rant about this. No, it is absolutely
not true-color -- although this is something which NASA insists on claiming, to its detriment. It annoyed me when they used the same technique to show a "true color" view of the surface of Titan[1], and it's annoying me again now.
What this image shows is the average color Pluto. The colour information comes from a much lower-resolution image, which was unable to resolve color differences between regions. In truth, Pluto could be wildly multi-colored -- but these kind of images, tagged with the "true color" label, lead you to think that that Pluto (and Titan) are a boring uniform sepia.
To understand just how wrong it is to label these images as "true color", try the following experiment:
1: Find a nice colorful picture of, say, a rose garden.
2: On a satellite image, find the color-value of that rose garden at, say, a spatial resolution of 50km per pixel.
3: Take the color-value of that pixel -- which, on earth, will range from a muddy greyish-brown to a muddy greyish-blue -- and apply that hue to the entire image. You will now have a very sorry-looking rose-garden.
4: Release the image accompanied by a press release claiming that this is a "true-color" view of said rose-garden.
See the problem with this?
Honestly, the folks at NASA are geniuses, but they really need to stop doing this kind of thing. One thing they don't understand very well is human perception and psychology. If you show people a greyscale image, they will assume that it represents something which is actually more colorful, and their imagination can take it from there. On the other hand, if you show people an image which is colorised with a uniform color, they will assume that is the actual color -- especially if you've then gone on to tell them that it's a true-color image. In truth, it's no more "true-color" than the final image in the rose-garden experiment above. This, unfortunately, convinces people that they're looking at something far more drab than they actually are.
Tl;dr: Where NASA lacks actual color imagery, they really shouldn't colorise pictures with a uniform hue and then call them "true color". It's bordering on false to do so, and results in images which are much more drab than a simple black-and-white image would be, and possible much more drab than reality.
https://en.wikipedia.org/wiki/Titan_(moon)#/media/File:Huyge...