I looked around and couldn't find a specific definition of banding, but I'm assuming you mean when the shading line and the outline run right alongside each other and it makes the pixel breaks really obvious?
Yes, precisely that

I could fix that stuff with intermediate colors,
You got it right again - that's called anti-aliasing.
I'd say your mindset seems suitable for pixel art

but you and the other commenter were mentioning that I should go with less colors rather than more.
You see, pixel art isn't just about pushing pixels, but it also requires choosing the palette wisely so that the number of colors is "optimum" - the subject is quite vast and I'm not the best person to teach you this sort of stuff, so I suggest you look around here for "color conservation", "colors choice" and similar subjects.
Anyway, here's a quick hint: colors have to be chosen so that they can be used in a variety of ways and for a variety of purposes. F.ex., don't think "OK, this set of colors here is for the skin only and this other one is for the clothes", but rather try to pick colors that can be used in both contexts (for instance, the highlight color of clothes could be used as a skin tone). Choose color ramps so that they cross: this gives a more "unified" look to the final piece and saves colors.
As for the anatomy, I'm hoping that broadening the shoulders a bit might fix the weirdness of his proportions.
Actually I think this only would make it worse: the problem, IMHO (and I can't stress "IMHO" enough), is that the head is too big with respect to everything else.
saimo