I do both. I look at reference pictures, then try to match the colors among my collection of paints as best I can.
In scale modeling, there are some subjects where the process is made more exact. For example, for
Luftwaffe subjects, there are manufacturers who have identified their colors with the same coding system that the German Flight Ministry (the
Reichsluftfahrtministerium) used. Same goes for Japanese colors. But then, among modelers, there is usually debate about how authentic those colors are, and it can get heated.
Also, when checking references, you have to take into account how accurate the reference is. For example, in my area, Frederick the Great's army, there is currently a debate going on about the color of the dragoon's coats. The most popular references were compiled after the Napoleonic wars, so, around 40 years after Frederick himself died. Text references describe the color as "cornflower blue", which is a light blue, though not as light as sky blue. Illustrations show a lighter blue than that, but on the other hand, there is a surviving example of a dragoon's coat that is darker than that. So, what color do you paint?
Then, too, you have to ask yourself whether you're painting in toy soldier style, with gloss colors and little or no shading, or if you're painting in matte, a la connoisseur or the "Chinese" style. If you're using the latter, are you going to show weathering? That olive drab jacket on a GI in Europe in '44 might really have faded to a washed-out color, only remotely related to dark olive.
And you may decide to mix your own colors, too, if you can't find a commerically-produced paint, or just don't like what's on the shelf.
See how complicated this can get?
But at the high level, like I said, I use references, both text and picture, and then try to match with what's in my paintbox.
Prost!
Brad