A real format change, not just a renamed file
Renaming a .png file to .gif doesn't produce a working GIF — the internal data structure is completely different between the two formats. A real conversion has to decode the PNG's pixel data and re-encode it using GIF's own compression scheme, which comes with a specific, hard limitation PNG doesn't have: a maximum of 256 total colors in the entire image.
This one constraint is the whole story behind why PNG-to-GIF conversion needs actual thought, not just a format swap — a typical PNG photo can easily contain tens of thousands of distinct colors, and all of them have to get mapped down to 256 or fewer.
How a good converter picks which 256 colors to keep
Simply picking 256 arbitrary or evenly-spaced colors produces visibly poor results — banding, wrong-looking colors, ugly transitions. A properly built converter instead analyzes the image's actual color distribution and selects a palette that best represents what's really in the picture, using an approach called color quantization (median-cut is the standard, well-established algorithm for this).
This matters most for photos and images with smooth gradients or lots of similar-but-distinct colors — the quality of the color selection directly determines whether the result looks reasonably close to the original or noticeably degraded.
When the conversion is actually completely lossless
If your source PNG already has 256 or fewer unique colors — true for most icons, logos, and simple flat-color graphics — the conversion to GIF can use that exact original palette with zero color loss. This is the case that quietly works perfectly every time: simple graphics convert cleanly, while photographic images with thousands of colors are the ones that show visible compromise.
Knowing which category your image falls into before converting sets the right expectation — a company logo will look identical; a detailed photograph will show some color simplification no matter how good the quantization algorithm is.
The transparency trade-off worth knowing about
PNG supports smooth, gradual alpha transparency — semi-transparent edges, soft shadows, gradual fades. GIF's transparency is much more limited: a pixel is either fully transparent or fully opaque, with nothing in between. A converter handling this properly fills partially-transparent areas with a solid color (typically white) rather than attempting a partial-transparency mapping GIF genuinely can't represent, since faking gradual transparency in a format that doesn't support it would just produce a worse, more confusing result.