Citizenship is the state of belonging to a particular settlement in a legal and complete way. Players who move into a settlement are at first only Residents. Residents gain a certain amount of benefit from their homes but in the end see only a fraction of the benefits that full citizens get. The freedom to grant Citizenship is a highly flexible permission in the many variations of Civic Systems. Getting yourself made into a citizen may require something different in every settlement. Here are some really good reasons to gain citizenship wherever you choose to live.
When it Matters
There are many situations in which it's more beneficial to be a Citizen than just a Resident. They get all kinds of bonuses, and many Civic System permissions and eligibilities are based on a player's citizenship status. It may become very difficult for residents who have consistently denied citizenship to gain power effectively in their communities and gain the most from their chosen homes.
Most settlements don't allow non-citizens to own land land. This prevents resident players from buying either Lots or Buildings, even if they are for sale in the private economy. While some settlements may expand land ownership to non-citizens, their ability to travel and maintain ownership will often still be limited. This can also be adjusted from inside the government, but on default most settlements will prevent or penalize non-citizen land ownership. It should be noted, the land and citizenship must be in the same settlement. having just any citizenship does not make owning land in all settlements easier.
There are many Civic Systems that allow players to vote both on their new leaders and on prominent changes in government policy. While freedom to vote increases with Civic populism, there are no systems that by-default allow resident non-citizens to cast a vote on any of these issues. Denying citizenship is an effective way for an apparently free settlement to clamp down on resident rights. On the other hand, settlements that are not rewarding to live in may quickly find themselves ghost-towns.
Settlement / Scenario Bonuses
There are many actions, events and passive effects that provide bonuses to all citizens of a particular settlement. Not having a citizenship when these bonuses are distributed is a foolish way to miss out on a richer, faster gaming experience. Whether you find a settlement that's excited to have you or just one that freely distributes citizenship, it's better to be a citizen than experience an incomplete version of your home settlement.
While your level and class may hypothetically have unlocked access to diplomatic actions, most Governments do not allow just anyone to initiate Treaties and Wars. Permissions can be distributed and citizens are much more likely to be allowed to do casual things (like Give Gift) than non-citizen residents. Players who want to become involved in their settlement's Diplomacy with other cities should first seek Citizenship.
Why stop with the ability to vote and help your Settlement diplomatically? Why not just run for Minister, or even Sovereign? Being a a well known and respected citizen of your community is a great way to get into local politics. Of course, you can always go off on your own (with a Lord character) and start your own Settlement. At that moment, you'll be the only citizen. First Citizen even.