To reach the rank of Citizen, you must complete two quests: “A Better Mousetrap” and “Baiting the Trap”.
A Better Mousetrap – Talk to Sheogorath and he will inform you that he selected you to help stop Jyggalag from destroying the Shivering Isles. Part of this task includes reactivating Xedilian, which was a dungeon formerly used to exclude unwanted visitors prior to the creation of the Gatekeeper. To accomplish this, he gives you the Attenuator of Judgment and a book called Manual of Xedilian. You can either read the book or talk to Haskill to learn what you must do to restore Xedilian to its former state.
Travel to Xedilian, southeast of Fellmoor, and you will receive a quest update upon entering that instructs you to find three Focus Crystals and place them on the appropriate Judgment Nexus. Follow your quest markers to find groups of Grummites inhabiting the ruin. Each Grummite Shaman will have a staff with a Focus Crystal. Find all three and place them on the Judgment Nexus nearby. Once you’ve placed all three, follow your quest marker to the Resonator of Judgment, kill the final batch of Grummites, and activate the Resonator.
Baiting the Trap – After activating the Resonator of Judgment, step on the newly opened teleportation pad and you’ll be transported to a different part of the ruins. Talk to Kilban Nyrandil who will tell you that there are three adventurers in the ruins that need to be dealt with. Follow Kilban to the first observation room and you’ll be presented with the choice of inflicting death or madness. The choice you make won’t matter in the end. After you’ve made your choice, watch the results and follow Kilban to the next room. Repeat the procedure for the second and third members of the party. When you’re done, Kilban will give you the items that the adventurers were carrying. When you exit Xedilian, you’ll be attacked by three Knights of Order. Kill them, return to Kilban for a brief conversation, and then return to Sheogorath to complete the quest.