As far as I know, there is no citizenship requirement, though.Convention has the G-G chosen entirely by the government and being a citizen of that country.
It seems pretty clear to me that she was well within her authority to say no. The political ramifications could have been significant, though, just for the fact of a GG opposing a sitting PM.Everything I've read suggested she really didn't have a choice unless she were to stretch the definitions of her role. Don't get me wrong, I wish she had said no.
It isn't like the selection is of particular importance, but I wonder if we can continue our string of foreign-born GGs, perhaps one from the middle east (we have Asian and black covered now).