Here's a repost of one of my anime articles from my Manga.com days...
Lilac Hair and Enormous Eyes
Ever wonder why your favorite anime character has chartreuse hair and pupils the size of saucers? No, it is not just a bizarre whim on the part of the Japanese. Both extraordinary features got their start in the Japanese manga (comic) tradition, and since many anime are animated versions of popular manga, it is only natural that conventions made familiar in the mangas would prevail in anime as well.
"In contrast to the men's and boy's comics, where the male characters have think, arched Kabuki-style eyebrows and glaring eyes, heroines in girls' comics are generally drawn with pencil-thin eyebrows, long, full eyelashes, and eyes the size of window panels that emote gentleness and femininity. Over the years, artists have also come to draw a star next to the pupil that perhaps represents dreams, yearnings, and romance - and beneath the star to then place one or more highlights. Both males and females in comics are given this treatment, although the eyes of the males are somewhat smaller, as are those of cold, evil people. The combined effect of the stars and highlights produces what appear to be liquid pools of rapture. Appropriately, there is even a monthly girls' comic magazine titled Hitomi, or 'Pupils.'"
Odd hair colors and styles also got their start in the manga world.. Schodt writes: "Since comics are generally printed in only one color, women artists have discovered that they can help balance the page or differentiate between characters by not inking in their black hair. Often the same character's hair will be inked in in one frame, and then only outlined in the next, especially if set against a dark background. To the unaccustomed eye a Japanese character may therefore appear to have white or blond hair, but the fan is never confused. She knows it to be black in reality.
The covers of shojo manga are traditionally done in pretty pastels. As a publicity stunt, publishers began coloring the outlined hair in pink or pale green, in order to draw the attention of readers at the newsstand. As stories from manga were made into anime, the directors discovered that keeping the hair colors portrayed on the covers made for easy character identification. No one confuses a pink-haired girl in a sailor-suit school uniform with a light blue-haired girl in a sailor-suit school uniform. Further differentiation could then be achieved by giving characters spiky or bizarre hair styles.
As time went along, a second hair-color convention developed in reaction to the first. Black hair began to signify normality or virtue, while colorful hair became a signal for the exotic or supernatural. Thus, the supernatural oni Lum of Urusei Yatsura has green hair. Or, the preponderance of titles, such as Tenchi Muyo, where the cast includes a dozen characters with bizarrely colored hair, but the hero or heroine is a brunette. Also, black hair is sometimes used to indicate the 'correct' or 'better' character. In Ramna ½, for instance, the red-headed pigtailed girl indicates the supernatural girl form, while the normal boy Ramna is black-haired. In Vision of Escaflowne, Van's dark hair indicates that he, not the blond Allan Schezar, is the true hero meant for the heroine.
Heroines in shojo stories often have very normal black or brown hair, such as Hitomi of Escaflowne, or Miaka of Fushigi Yuugi, while the exotic colors are reserved for the bishonen or the villains. One significant deviation from this is Utena with her bright pink hair. However, since the other girls in Revolutionary Girl Utena have more natural hair colors than do the male characters, whose hair colors include pink, dark green and light blue, Utena's brightly colored hair may be another indication of her propensity to dress and act like a boy, i.e. "unnaturally."
Over time, these various conventions have become so accepted that now days, the Japanese audience thinks nothing of seeing a giant-eyed character with spiky blue hair talking to a relatively normal looking black haired boy. To Western eyes, these characters may at first seem bizarre, but anime fans soon find that they can overlook these oddities, the same way we overlook the disturbing fact that most shojo heroines are only twelve years old. Certainly, it is true that the outlandish colors and hairstyles make the characters easier to identify, and the large eyes do allow anime to express a depth of feeling and intensity often lost in Western animation. Still, it is nice to know why they look the way they do.