White chocolate is typically a mixture of cocoa butter, sugar, varied milk products and vanilla. It also usually contains lecithin, a lipid found in vegetables. White chocolate is commonly not considered true chocolate by purists because it lacks chocolate solids.
One of the great misconceptions regarding white chocolate is that it is not at all derived from the cocoa bean, as true chocolate is. This is false. After cocoa beans are extracted from their pods, they must go through a process of fermentation, drying, roasting and cracking, after which the cocoa bean shells can be opened and the nibs removed. These nibs are considered by many as the closest thing to pure chocolate.
However, nibs can rarely be eaten or applied desirably as is. Instead, they are typically ground down into a paste called chocolate liquor. This liquor is then comprised of two essential ingredients: the chocolate solids, which provide most of the chocolate flavor, and the cocoa butter, which provides the fat. When white chocolate is made, the preparer simply excludes the portion of the ground nibs forming the solids, opting to use the cocoa butter exclusively. It is then mixed with the aforementioned ingredients. So while it is not chocolate in the conventional sense, white chocolate can be considered a creative spin on a natural byproduct of the chocolate-making process.