Civilians can be recruited by simply walking up to them, holding your ACE interact key (Windows key by default) and choosing "Talk", then "Recruit". The cost of recruitment will depend on resistance support and the stability of the town. You need a minimum +10 support in the town to recruit.
New in 0.7.7.3: You can now also talk to civilians using the 'Y' key while looking at them within 10m.
Using a Refugee Camp
Building a Training Camp at an FOB allows you to recruit trained and equipped soldiers. They will start a higher rank and skill than civilians and if you have a Warehouse will be equipped using items from it.
The function keys (F2-F10) are used to command your recruits. Hitting a function key will give you options on your scroll menu to send them to a location, get in a vehicle and much more. See the Arma 3 Field Manual for more information.
Using the Y menu (with no recruits selected) and choosing "Manage Recruits" will show you all your recruits and their current rank. The recruit will rank up in skill when performing tasks like Looting or killing enemies.
The Y Menu
Opening the Y menu with one or more recruits selected will give you further, Overthrow specific options including..
Main Article: Looting
The recruit will drop all the items they are carrying into the nearest container/vehicle and then start to loot all bodies within 100m into the same container/vehicle.
The recruit will open the nearest container/vehicle and show you the inventory screen, allowing you to arm and equip them.