Citizens are fleshy meatsacks who require frivolous things like "Food" and "Oxygen" to stay alive.
Weird squid guys with flat heads and bug eyes
Goggle-wearing green elephants with no ears
Hairless raccoon things?
Fat fish guys with a thing growing out the top of their head
Citizens work most efficiently, work more often, and walk faster when their morale is high. Morale ranges from "Deeply Sad" to "Ecstatic".
Morale is lost due to events such as: the deaths of others (particularly friends), a failure to fulfill personal needs, and disagreements with other citizens.
Morale is gained due to events such as: positive conversations, cooked meals, and cosmetic objects.
Needs include Hunger, Rest, Socialization, Amusement, and Duty. (Aside from the dictionary definitions of those words can someone please ask the devs for specifics?)
These can be seen from the Stats screen
Each citizen has a couple of different traits such as Bravery, Neatness, Chattyness, and Gregariousness. (Again, still not sure of specifics)
They also each have a favorite food and a favorite band.