You will be able to get a custom nickname, it must be appropriate, no more than 14 characters. You get to keep this nickname forever, however you will need to request it to be changed each season as the files get wiped every season. If your chosen nickname is inappropriate, staff may contact you about a name change.
You are able to select the color you want by using Minecraft text formatting colors with &c&3&2 . . . (all formatting codes can be found here (link) ).
You cannot use special formatting like bold, italics, changing text, etc.
Note that using formatting codes counts towards the character limit, we can't change that unfortunately.
In game you will have a "~" next to your name so others know that it is a nickname.