A little history will help you understand the purpose of the gray card:

In the mid 1930's, Messrs Jones and Condit at the Kodak Laboratory determined that statistically, a typical sunlit scene integrated to a reflectance value of about 18%. About this time, the Western Electric Company brought to market the first light meter. Kodak Labs published a recommendation; place a Kodak film box in the scene. Seems the box reflected 18% of the ambient light. Now measure the reflected light from the box top and use this reading to set your exposure.

In 1941, Ansel Adams, a prominent landscape photographer ,and his friend, Fred Archer, a photo magazine editor, jointly published the Zone System which provided photographers with a method to precisely fine-tune exposure. Their zone system revolves around the use of an 18% placard (battleship gray). This card replaces the Kodak box top. The 18% gray target became the de facto standard. Today film and paper speed as well as the digital chip are calibrated, and film and digital ISO is established using the 18% gray card.

Kodak then made and marketed a gray card as an aid to help photographers make exposure determination. Because early light meters sported a selenium cell, they failed to properly read the gray card in dim light. Under these conditions a white card was often substituted. When the white card was used, the ISO was adjusted by dividing it by 5. Such a reading is about the same as one taken from a gray card.

The gray card kit often contained a black placard as well as white. These placards could be placed in the scene and photographed. The resulting negative or slide thus contained references used to make measurements to aid in control development and exposure. In color photography the gray card became the de facto standard for a neutral color balance for color film, color slides and color prints.