The Citadel is the hub of all galactic races. Many ambassadors from the majority of the races can be found among the Citadel. It's known as the political, cultural and financial capital of the Galaxy. The races of the Citadel consider it as the greatest creation from the Prothean race that became extinct over 50,000 years ago.
The Asari were the first race to re-discover the Citadel after finding old Prothean technology and using it to create Faster-Than-Light speed travel (or FTL travel for short) which eventually led to them discovering a Mass Relay. The Salarians were the next species to find the Citadel just decades after the Asari. The two species worked together to create the Citadel Council. The Volus were the next species but they weren't allowed to join the Council, instead they were given an Embassy. The Asari then discovered the Elcor race and helped them discover their closest Mass Relay, they were also granted an embassy on the Citadel. The Turians were given a seat on the Council as a reward for their help during the Krogan Rebellion. The Humans are the newest race to the Citadel after they discovered a Prothean data cache on Mars in 2148. This advanced technology led the Humans to travel further into the Sol system and discover a Mass Relay encased in ice near Pluto, which was originally thought to be a moon.
The Krogans were given an embassy on the Citadel for their help during the Rachni Wars. However, they were removed for their part in the Krogan Rebellion. The Quarians also had an embassy until they were removed as punishment for creating the Geth. The Batarians are the most recent species to leave the Citadel. When both Humans and Batarians began to colonize the Skyllian Verge, the Batarian Ambassador asked the Council to declare the Skyllian Verge an area of "batarian interest". When the council refused, the Batarians cut all ties with the Citadel Council and began indirectly attacking human colonies in the Verge by the use of pirates and mercenaries. This small war became known as the Skyllian Blitz.
The Citadel is a massive Space Station with a population of over 13 million. However, only 3 main areas are accessible to Commander Shepard.
 Citadel Tower
The Citadel Tower is where all the political decisions are made. At the top of the tower is the Council Chambers. The Chambers are not open to the public, you can only get in if you have the authority or if you're granted an audience with the Citadel Council.
The Presidium is the heart of the Citadel. It's home to the embassies of all Species living on the Citadel. It also has a Financial District where you can find the financial genius, Barla Von. There's a Consort Chambers where you can book an appointment to see Sha'ira. There's also a bar, an emporium and access to the Citadel Tower.
 The Wards
Barla Von refers to the Wards as the "cultural heart of the Citadel". On the Lower Wards you can access the Lower Markets and a nightclub called Chora's Den which is run by Fist. The Upper Wards is home to the Upper Markets, the Flux casino, the Med Clinic and the Citadel Security Services (known as C-Sec).
It's popular belief that the Protheans created the Citadel. However, later in the game this will be proven wrong. It was actually the Reapers who created the Citadel and the Mass Relays. They created them as bait to begin a cycle of galactic genocide. The Reapers wanted other species to discover the Citadel and use the technology to expand across the universe. Then when the Galaxy was reaching it's peak in technology, the Reapers would appear and destroy all traces of their existence and start the cycle again. The current species of the Galaxy know very little about the Keepers who work on the Citadel, they believe they're a robotic race created by the Protheans to maintain the Citadel and its systems. However they are actually controlled by the Reapers. When they believe it's time to restart the cycle, the Keepers will open a path between the Citadel and Dark Space allowing the Reapers to come through.
So just like the Asari, the Protheans had nothing to do with the creation of the Citadel. They just stumbled across it, probably like many species before them.