The citizens are background characters from The Wonderful 101.
The citizens would be on the streets and paths of various levels and also trapped in Gatchas. When you circle around a group of citizens, they would be transformed into heroes, giving you enhanced abilities with Unite Morph. The citizens would only be temporary members of your team and would disperse after the level ended. Some citizens that you recruited would actually be Wonderful Ones. These would stay with your team permanently, allowing you to begin missions with more heroes and boosting the power of the Unite Morph that corresponded to their weapon type.