Is there a formal word for people that are local to a place?

I'd go with "locals":

Collins:

6. an inhabitant of a specified locality

Native

A person born in a specified place or associated with a place by birth, whether subsequently resident there or not: a native of Montreal

Source: oxforddictionaries.com

It depends whether you are referring to the people who live there now, who may not have been born there, or whether you are referring in a more particular way to, for example, the customs, language and culture of Montreal.

People or things occurring naturally in a particular place are indigenous. For some readers this word may connote First Nations.

If you're fond of big words, autochthonous is a synonym for indigenous.

Often for diseases or animals the word used is endemic.

There are multiple ways to refer to the locals of an area. Depending on the type of paper you're writing you may want something less colloquial that "locals" and more scholarly. Things to keep in mind while choosing the best noun would be things like, "are these people native/indigenous to the region?"

Another thing to keep in mind is the fact that these people may have an accepted designation that they generally choose to go by (e.g. people from Phoenix are Phoenicians).