In putting forward his theory of the social contract, Hobbes isn't suggesting for one moment that this is how the state was actually created. His picture of the Leviathan, an artificial person whose body is made up of the bodies of its citizens, is purely metaphorical. In other words, it's not literal. The state doesn't literally comprise the bodies of its citizens, but only metaphorically.
As with many writers, Hobbes uses metaphor to illustrate a point that would otherwise be impossible with strictly literal language. In his use of metaphor, Hobbes hopes to engage with the reader's imagination, making them understand more readily the true nature of the state.
The Leviathan is a particularly useful metaphor in this regard as it emphasizes the awesome power of the state in Hobbes's political philosophy. As Hobbes's original readership would've known, the Leviathan was a gigantic, terrifying sea serpent in the Bible.
Hobbes draws upon this biblical metaphor in putting forward his notion of the absolutist state that comes about once the citizens of a given territory get together and choose to confer absolute power on an almighty sovereign. If the sovereign is the head of the Leviathan, then the citizens constitute the body. This is the direct result of the citizens coming together to enter into a political arrangement—a social contract—designed to protect their lives and property.