Citizen referendum is a synonym for a veto referendum. Veto referenda occur when a state legislature passes a bill. If people who oppose the bill live in a state that allows citizen referenda, they may proceed to collect enough signatures to force the measure to a vote of the people.
Groups who oppose a new bill would be motivated to go to the trouble of a petition drive to collect the needed valid signatures if they believe that the state's voters would reject a piece of legislation that the state's legislators approved; or, in other words, if they believe the state legislature is out-of-step with the will of the people in the matter at hand.
The term "veto referendum" is increasingly used to describe this type of referendum because, by including a reference to "veto", the term is more quickly suggestive of the fact that the citizens are being offered the opportunity to veto legislation passed by their state legislature.