What evidences this technique of visualizing different color words in sequence, to help you sleep?
Imagery Distraction

The technique referred to is called 'imagery distraction' (Harvey &amp; Payne, 2002).

Some evidence has been found for “imagery distraction” being associated with shorter sleep onset latency and less frequent and distressing pre-sleep cognitive activity.


  The success of the “imagery distraction” task is attributed to it occupying sufficient “cognitive space” to keep the individual from re-engaging with thoughts, worries, and concerns during the pre-sleep period.


The type of imagery seems less important.  So visualizing coloured words should be equally as effective as counting sheep.

Harvey, A. G., &amp; Payne, S. (2002). The management of unwanted pre-sleep thoughts in insomnia: distraction with imagery versus general distraction. Behaviour Research and Therapy, 40(3), 267–277. doi:10.1016/s0005-7967(01)00012-2