As I see it:
Federation citizenship is bestowed upon any persons whose parents (biological, or by adoption) are Federation citizens, or who are born upon a world which is a member state of the Federation. Starfleet officers are conferred Federation citizenship as well, if they do not already possess it.
Colony worlds become a bit of a weird grey area; often, they are established by Federation citizens, but the worlds themselves are not inherently member worlds until such a time as they apply for membership (though, worlds colonised by Federation citizens tend to be fairly easily accepted as member worlds when they’re ready).
So, the inhabitants of colonies on the Cardassian side of the DMZ are commonly Federation citizens by birth, even though the worlds are no longer in “Federation Space” (a fairly nebulous concept). Cardassian colonies on the Federation side are not considered Federation colonies (unless they ask to be and are accepted), and their inhabitants are not Federation citizens. They’re independent worlds that just happen to be surrounded by Federation space.