The rendering space is the working color space in which the rendering calculations are performed. It is also the color space of the rendered output (unless you apply an output transform). When color management is enabled, 2D texture files and other images get converted from their input spaces to the rendering space automatically. You can set the Rendering Space of a scene in the Color Management preferences.
It's always best to select the rendering space when you first start a project or scene. The color values defined by color controls, including solid colors and ramps, are treated as untransformed rendering-space values. If you change the rendering space later, the resulting color will be different. This is because the color represented by a set of values depends on which primary colors they refer to. For example, the color represented by [0.2, 0.6, 0.4] is different when using the sRGB primaries as compared to the ACES2065-1 primaries.
The default rendering space is scene-linear Rec 709/sRGB. This color space uses the same primary chromaticities of red, green, and blue as sRGB and HDTV (Rec. 709), but with scene-linear color values (in other words, numeric values that are linearly proportional to the luminance in the scene). It is a common rendering space used in many workflows. However it has a very limited gamut, meaning that it can represent only a relatively small range of colors when compared to digital cinema or film. For this reason it is often desirable to use a rendering space with a wider gamut, especially when rendering 3D elements that will be composited together with footage from digital cameras or scanned film plates.
The scene-linear DCI-P3 color space uses the same primaries as a DCI/SMPTE "P3" reference projector, but again with scene-linear color values. This color space has a wider, but still limited, gamut. The advantage of using this color space is that it can represent all the colors available on a modern projector. In addition, there is little risk of producing colors that are out-of-gamut for a projector, which might cause unpleasant surprises if the content is ever viewed in the future on a device with a wider gamut.
The scene-linear Rec 2020 color space is similar to scene-linear DCI-P3, but for UHDTV instead of digital cinema. It uses the same primaries as UHDTV but with scene-linear values, and there is little risk of producing colors that are out-of-gamut for UHDTV.
The Sharp RGB color space has a very wide gamut. It uses the Sharp RGB primaries proposed by Greg Ward, with scene-linear color values. One of its advantages is that it minimizes hue shifts under different lighting conditions.
The ACEScg color space is part of the ACES standards, and is designed to be appropriate for computer graphic operations like compositing and 3D rendering. It encompasses both the Rec-2020 gamut and the DCI-P3 gamut for a range of white points.
The scene-linear CIE XYZ and ACES2065-1 options are both extremely wide-gamut color spaces. Their advantage is that they can represent any possible color. Their disadvantage is that they can easily produce out-of-gamut colors, and in addition can be unintuitive to work with.
If you are using an OCIO configuration file, then only the color spaces that are defined in the file are available. If one has them has the "rendering" role, then it is the only one that you can use as a rendering space.