I Think he's referring to the fact that if your character died in the C64 version of the city he was erased form your character disk. I was pretty sure it was the same with all versions of the city though so i don't know. The instruction manual advised you to back up your character disks to prevent losing characters and there was even a program built into the game (disk one side 2 i think?) that would allow you to copy your character disks
if you are playing it on an emuator it is pretty easy to just copy your file so you have a backup in case you die
I am one of the few people who started playing with the dungeon and never could quite get into the city
~Sean