This idea of the unknown citizen is also an allusion to the "Unknown Soldier."  This is a reference to the unknown, unidentified American soldiers who are buried in Arlington National Cemetery. They are meant to represent all the soldiers who have died and been buried unknown.  People who have lost a loved one whose body was not returned or who was reported as missing in action are often comforted by this tradition.  And many people stop by these graves to pay their respects to the men (and now women) who have given their lives to their country but remain unidentified.  There are graves for World War I, World War II, the Korean War and the Vietnam War.  There is no tomb at Arlington for an unknown soldier from the Civil War.  In the case of the unknown citizen of the poem, someone has died unknown because of the conformity that was imposed upon him by the government and society, a conformity he seems to have embraced, not worthy of our respect.  But the unknown soldiers remain a symbol of sacrifice and valor that most people do respect and even cherish. 

This poem is told from the point of view of state bureaucracies that consider people as numbers or statistics rather than unique individuals. This particular person is unknown because he is a complete conformist to social norms. There's no reason for the state to know his name, because he poses no threat and is interchangeable with millions of other people. He does everything he is supposed to do and is completely well adjusted: "He worked in a factory and never got fired ... he was popular with his mates and liked a drink." He buys what he is told by advertisers to buy:  a phonograph, a radio, a car and a frigidaire." He holds whatever are the "popular opinions" at the time.

The poem, written in 1939 soon after Auden moved to America to a society that seemed complacent to him, works as satire in two ways. It satirizes and pokes fun at a government that reduces people to statistical norms, but it also makes fun of the people who conform, never think for themselves, and never rebel. The unknown man is anonymous because, in the end, he never does anything to make himself stand out. 

Who was the "unknown citizen" in Auden's poem, and why was he called this?

Auden's poem "The Unknown Citizen" is written in the form of a government report about a citizen who is, in death, commemorated by the State but remembered only by numbers rather than by his name. The idea of the unknown citizen is usually understood to refer to the tombs of unknown soldiers which were erected after the First World War to represent all those lost in the conflict whose bodies were not found and whose names were not known. Auden's suggestion here is that this practice actually erases our individuality—and that the practice of modern life in general is making us lose our identities.

The unknown citizen, then, is an ordinary man who fitted perfectly into society during his lifetime. His employers were "satisfied" with him, and his views were in keeping with what was expected. He had friends, was insured, got married, had children, and did everything in the "normal" and "right" way. However, in death, he is nothing more than a statistic. The state commemorates him in the same way as it has commemorated, presumably, countless other people who also did everything in the right and normal fashion and contributed the right number of children to the population. Auden's commentary indicates that governments do not care whether people are actually happy: they want to reduce people to machines, which function according to pre-determined guidelines. But this is not really how people are, and it is dangerous to treat humans, who are individuals, in this fashion. If we do this, we will all become "unknown" in death.