One could be a citizen of a country, but a resident in another.
I can have either a Manx passport (British Islands) as a Manx citizen (by birth) or a British Isles passport (by residence).
Passports are specially made to prove the nationality of a person which is going to visit a foreign nation, which implies proof of citizenship.
If I did not have my Italian passport I could never reside legally in UK since I would not able to PROVE to the Home Office and the Border Agency that I am an Italian citizen.
Citizenship has nothing to do with where someone could reside, but all to do the person's background and right to be part of a nation.