The chameleon device was a method of disguise. It was capable of changing the appearance of a person, but it had a limited duration and when it was turned back off it caused water vapour in the air to condense.
Shoju tried to fit in with the humans of a 13th century Japanese village with a chameleon device, but it was unable to do so for long and when he switched back into his normal form he frightened the villagers and caused flooding. The Eleventh Doctor was able to use his sonic screwdriver to break it, keeping Shoju in human form. (COMIC: Samurai's Secret)