While posterization is often done for artistic effect, colour banding is an undesired artifact.
In 24-bit colour modes, 8 bits per channel is usually considered sufficient to render images in Rec.
This will happen with gradual gradients (like sunsets, dawns or clear blue skies), and also when blurring an image a large amount.
[1] Colour banding is more noticeable with fewer bits per pixel (BPP) at 16–256 colours (4–8 BPP), where there are fewer shades with a larger difference between them.
Possible solutions include the introduction of dithering and increasing the number of bits per colour channel.