This is much too complicated to try to explain here, but I will give it a go. If you look at a Peacock which appears to be blue. The birds feathers are not actually blue but black, they appear blue due to the way the feathers absorb or reflect light. There are three basic elements of colour that can be altered and combined in different ways to produce what we see. They are the Yellow Family Pigment (or psittacins), Grey (or Blue) family pigments (or Melanins) and structural colour.
In a green bird it requires all 3 of these elements working together. Put simply like mixing paint green is a combination of yellow and blue. Yellow in parrots is real and is produced by pigments commonly called psittacins. There are other related colours also produced by this class of pigments - reds, oranges and pinks. So in a blue bird the yellow pigments go dormant and the blue or grey family (melanins) become dominant. Because the psittacins are removed any red, orange or pink will also disappear from the bird thus turning them white. This is a very simplistic explanation. If you want to learn more about it and also all about the other mutations in birds and how they are produced I suggest you buy a book published by The Australian Birdkeeper Magazine. They have a wonderful range of books called A Guide To ..... These books are all written by experts in their field. The book on Colour Mutations and Genetics in Parrots is the one you should get. It was written by Dr Terry Martin BVSc. Terry is an Avian Vet based in Queensland Australia and is an expert on Genetics. This book was launched at a Convention we had in Sydney in 2000 held by The Grass Parrot & Lorikeet Society.
Here is a link to the Australian Birdkeeper Book Shop for the book. It can be done by mail order. If you need to contact them you can go to the bottom of the page and obtain their email address.