In many dystopian stories, people call each other citizen. In other contexts too, I'm thinking Citizen Kane for example. Why? What is implied here?
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It's backlash against titles of nobility particularly, and the idea that some families or occupations deserve special treatment in general, by giving the exact same title to everyone, regardless of gender, birth, education, or position. I believe you'll find a non-English equivalent was frequently used during the French revolution. "Comrade" is also used, but while both express equality, "Citizen" implies allegiance to country, "Comrade" implies allegiance to party.
and so on, all of which recognize inequality of position.
In a society which wishes to express respect for individual accomplishment but not inheritance, it might be combined with an occupation-linked honorific:
"Citizen" has a long history of being a proud title. Cicero gave voice to this sentiment when he declaimed "Civis Romanus sum" ("I am a citizen of Rome") in his Actiones in Verrem. It is at once patriotic and exclusive; a citizen enjoyed certain rights and protections and was the equal of any other citizen.
We must remember that much of English has been influenced by the classical education given to its ruling class. From the same Wikipedia article:
Spoken normally as a respectful way to address someone, it undergoes a transformation: the dystopian novel adds an ironic element to the title, since the "rights and protections" afforded a citizen are somewhat turned upside down. They become vulnerabilities and liabilities.
Now, there is another meaning to "Citizen" which implies that someone who is grand and rich and lordly may be styled "Citizen" to denote that he is a man of the people. This is, I believe, what Orson Welles meant by calling Charles Foster Kane (the thinly veiled image of William Randolph Hearst, who built a publishing empire and tried to use it to bend the country to his will) "Citizen Kane". This man fancied himself a populist, yet lived in San Simeon, one of the most expensive and lavish estates since Louis XIV's Versailles and the various imperial palaces of the Roman emperors. So the title is used ironically.
It specifically harks back to the French Revolution.
"Comrade" similarly recalls the Soviet era.
In both cases, the society was supposedly much more equitable and fair, but with hindsight is seen as less than perfect.
What that implies to me is that in the fictional world in question, the most important thing to know about someone you otherwise don't know is that they are subject to the same government as you. It implies a preoccupation with the state which we in this reality don't quite have.
For example, when I meet some random person on the street, and wish to address them with a modicum of respect, I will call them "Sir" or "Maam". This is saying that, even though I don't know you, I'm respecting you based on a certain level of maturity I perceive. If you in fact don't act with that level of maturity, you wouldn't be deserving of my respect.
If I were instead to call you "Citizen", what I would be saying is that the respect I give you is only a function of your connection with (and presumably subservience to) the State. The implication here is that those who are citizens of other states, as well as those who may have issues with subjecting themselves to the State's authority, are not in fact worthy of my respect.
(note: By "The State" above, I am of course referring to a supreme governmental authority, not to a particular subunit of government used in the USA)
Regarding Citizen Kane, the title of "Citizen" is used to note that Kane holds no official position of power. He's not an elected politician, yet he wields considerable power as a newspaper magnate.
I think "Citizen" also points to Kane's humble roots and meteoric rise.
Orson Welles's working title for the film was John Citizen USA.
Addressing someone as "Citizen" (as opposed to first name, last name, or other title) can imply an emphasis on their service to/position in a possibly-totalitarian state.
This is the use of "Citizen" in the video game Half-Life 2, for example.