You can turn on color by using the 'ANSI_COLOR' directive in the citadel.rc file. You can set it to "on" to enable it, or "off" to disable it.
It's normally safe to leave this turned on for all users. When the client starts up, it will send an enquiry to the terminal asking if it has ANSI support. Nearly all terminals will answer in the affirmative and color text will be enabled. If the response is not received, color and other special terminals will be disabled during that session.
Since all modern terminals implement some sort of ANSI support, the Citadel console client no longer uses terminfo or ncurses, but instead outputs ANSI control sequences directly.