The Preamble does not specifically define the word "People." Nevertheless, the definition becomes apparent in the context of the other words and prior history.
Before the United States existed, there was no legal government. A group of representatives, acting "in the name and by the authority of the good people of these colonies," declared the independence of the colonies from the British Crown and the state of Great Britain.
From the beginning, in the 1776 Declaration of Independence, the people were acknowledged as the source of authority, i.e. the sovereignty which authorized the Declaration of Independence.
Next came the 1777 Articles of Confederation (ratified in 1781). The states that existed by the authority of the people, created those Articles while in Congress assembled. That didn't work as well as expected.
In 1787 the people themselves came forth "to ordain and establish this Constitution for the United States of America" [see Preamble]. On September 17th, 1787, the states held a convention and all those present unanimously joined in. [see last paragraph of U.S. Constitution]
So, in 1787, unanimous concurrence was achieved, and the Constitution was born, later to be ratified.
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
TRUSTOR: We the People [trustors]
VENUE: of the United States
PURPOSE: in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty
BENEFICIARY: to ourselves and our Posterity,
ENABLING ACTION 1: do ordain [declare the law]
ENABLING ACTION 2: and establish [bring into existence]
WHAT: this Constitution [articles of incorporation for trust]
TRUSTEE: for the United States of America. [trustee]
The Preamble defines the context in which the remainder of the Constitution must be interpreted. Most of it is self-explanatory. Here's an explanation that points to popular sovereignty:
After the Declaration of Independence, but before the ordainment and establishment of the Constitution, the people of the United States pretty much handled their own affairs using the common law. They were not subject to any higher authority other than the authority of the common law as administered by the people themselves (self-governance). Although the states did exist, they only existed by the authority of the people. Every man was a king, and every woman a queen--and none had any subjects. Upon declaring our independence, we all became sovereigns and members of the peerage (nobility).
"The people of this State, as the successors of its former sovereign, are entitled to all the rights which formerly belonged to the King by his prerogative. Through the medium of their Legislature they may exercise all the powers which previous to the Revolution could have been exercised either by the King alone, or by him in conjunction with his Parliament; subject only to those restrictions which have been imposed by the Constitution of this State or of the U.S."
Lansing v. Smith, 21 D. 89., 4 Wendel 9 (1829) (New York)
"D." = Decennial Digest
Lansing v. Smith, 4 Wend. 9 (N.Y.) (1829), 21 Am.Dec. 89
10C Const. Law Sec. 298; 18 C Em.Dom. Sec. 3, 228;
37 C Nav.Wat. Sec. 219; Nuls Sec. 1`67; 48 C Wharves Sec. 3, 7.
NOTE: Am.Dec.=American Decision, Wend. = Wendell (N.Y.)
The enabling actions in the Preamble are significant because there is simply nothing in the use of those words to imply that the People relinquished any of their own power and authority. The People declared the law (ordain) without taking away from themselves the authority to declare law again in the future. The People established the Constitution without taking away from themselves the authority to establish anything else in the future. In other words, the people gave birth to the Constitution without giving up any of their own power and authority.
What was before, continues to be so today.
From the context of the Preamble, one may conclude that the laws of the United States do not apply to People. The People, as ordainers and establishers of the country are sovereigns of the country, may not be involuntarily subjected to the laws of the United States.
Because of Amendment X ("The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people," the government has no authority, and cannot assume any authority over the People. Government powers may not reach beyond that which is constitutionally granted. In order for the government to subject People to its law it is necessary for the People to relinquish their sovereignty. Sovereignty is a natural right which cannot lawfully be relinquished involuntarily. Any removal of sovereignty must be accomplished voluntarily by the subject himself.
Before ratification of the Amendment XIV, there was no legal definition of the term "citizen of the United States." The term was used, but only generally. After the Civil War the people enslaved were freed but there was no legal basis to recognize them as having any rights. Amendment XIV partially solved that problem.
"Free the slaves," was the rallying cry combined with the Civil War that resulted in Amendment XIV. Amendment XIV created a new class of person called "citizen of the United States." Any formally enslaved person could now claim citizenship, and, by the way, so could any of the People if they so choose to do so. Amendment XIV made possible the voluntary relinquishment of personal sovereignty.
It was also during the mid-1800's that the various governments took control of the school systems. The curriculum shifted from civics (the study of natural rights and common law) to American government (the study of civil privileges and statutory law). Emphasis was also refocused on "good citizenship". To blunt the people's perception, the civil privileges were called civil rights. The transition from teaching "natural rights" to teaching "civil rights" took about 100 years (from the 1850's to the 1950's). During the 1950's the school systems changed the courses named from "Civics" to "American Government." Hardly anyone now is aware of the subject of civics as a school course.
The phrase, "citizens of the United States," is defined in the Constitution for the United States of America, Amendment XIV:
Section 1. "All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."
Section 5. "The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article."
STRUCTURE OF AMENDMENT XIV
WHO: All persons
(A) born or naturalized in the United States, and
(B) subject to the jurisdiction thereof
PURPOSE: No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws."
ENFORCED BY: The Congress
ENFORCEMENT METHOD: Legislation
QUALITATIVE ANALYSIS OF AMENDMENT XIV
As discussed above, the People are sovereign. The People are not subject to the jurisdiction of the federal government, even though they are born in the United States.
Amendment XIV inverts the relationship. One of the qualifications to be a citizen of the United States is that one must be born or naturalized in the United States. Another qualification is that one must be, "subject to the jurisdiction thereof." It is not possible to be a citizen of the United States without being born or naturalized in the United States and subject to the jurisdiction thereof. But, if you are born or naturalized, and if you are subject to the jurisdiction, then you automatically qualify as a citizen of the United States.
From the point of view of the federal enforcers, the qualifications are worked in reverse. They reverse-interpret Amendment XIV as saying that if you say you are a citizen of the United States, then that automatically means you are totally subject to its jurisdiction [and have been born or naturalized]. This opinion is not shared by the judicial branch. See 14 C.J.S. 426, 430:
The particular meaning of the word "citizen" is frequently dependent on the context in which it is found, and the word must always be taken in the sense which best harmonizes with the subject matter in which it is used.
"One may be considered a citizen for some purposes and not a citizen for other purposes, as, for instance, for commercial purposes, and not for political purposes . So, a person may be a citizen in the sense that as such he is entitled to the protection of his life, liberty, and property, even though he is not vested with the suffrage or other political rights .
" Cal.--Prowd v. Gore, 2 Dist. 207 P. 490. 57 C.A. 458.
 Cal.--Prowd v. Gore. 2 Dist. 207 P. 490. 57 C.A. 458.
La.--Lepenser v Griffin, 83 So. 839, 146 La. 584
N.Y.--Union Hotel Co. v. Hersee, 79 N.Y. 454
 U.S.--The Friendschaft, N.C., 16 U.S. 14, 3 Wheat. 14, 4 L.Ed. 322
--Murray v. The Charming Betsy, 6 U.S. 64, 2 Cranch 64, 2 L.Ed. 208
Md.--Risewick v. Davis, 19 Md. 82
Mass.--Judd v. Lawrence, 1 Cush 531
R.I.--Greeough v. Tiverton Police Com'rs, 74 A 785, 30 R.I. 212
 Mass.--Dillaway v. Burton, 153 N.E. 13, 256 Mass. 568"
In any case, if you fail to object to the government's view of citizenship, then you will most certainly be subjected to the laws of the government. That means no rights, only privileges. To see a list of privileges granted or denied to the citizens (there is no list for the People's natural rights because the People automatically have all rights), see People's rights vs citizen's rights
The first issue to be resolved in any court proceeding is that of jurisdiction. Does the one entity have jurisdiction over the other entity? One should never go into court without a clear understanding as to whether he is there as a citizen, or there as one of the people.
If you claim you are a citizen of the United States, then it is strongly implied (though not necessarily true) that you are subject to the laws of the United States. On the other hand, if you are one of the People, then it is legally implied that you are a legal king, with a sovereignty superior to that of the United States, and subject only to the common law of the other kings (your peers). In short: the People are superior to the government, the government is superior to the citizens. That is the hierarchy.
As a king you "are entitled to all the rights which formerly belonged to the King by his prerogative." You can do what you want to do when you want to do it. You have your own property and your own courts. There is no limit as to what you may do other than the natural limits of the universe, and the sovereignty of a fellow sovereign. You should treat the other sovereign in accordance with the Golden Rule, and at the very least must never harm him. Your sovereignty stops where the other sovereignty begins. You are one of the owners of the American government, and it is their promise that they will support your sovereignty (i.e. they have promised to support the Constitution and protect it from all enemies). You have no allegiance to anyone. The government, your only [public] servant, has an allegiance to you.
As a citizen, you are only entitled to whatever your sovereign grants to you. You have no rights. If you wish to do something that would be otherwise illegal, you must apply for a license giving you special permission. If there is no license available, and if there is no specific permission granted in the statutes, then you must apply for special permission or a waiver in order to do it. Your only allegiance is to your sovereign (the government), and that allegiance is mandated by your sovereign's law (the government, though not absolutely sovereign, is sovereign relative to you if you claim to be a citizen of the sovereign).
Here is a typical example:
As one of the People you have a right to travel, unrestricted, upon the public highways. You have right to carry guests with you in your automobile. You have a right to own a gun and that right shall not be impaired by your servant, the government. You have a right to a grand jury indictment and a trial by jury, that is a trial directly by the people, not the government.
As one of the citizens, you may not travel by automobile unless you are either a licensed motor vehicle driver, or you are a passenger with permission to be on board. Gun ownership is a privilege subject to definition and regulation. You do not have a right to a jury trial in all cases, and no right to grand jury indictment--a trial is a trial by the government, not the people.