This card says my opponent must kill a cjaracter that he or she does not control. How could they have a character that they do not control?

What this plot card means is that the player chosen must choose and kill a character in play that is not theirs. It usually has most use in melee games as in 1v1 it basically lets your opponent kill one of your characters.

so in a 4 player game player A reveals this card and chooses player B.

Player b can now choose and kill 1 character controlled by player A,C or D if they have a character in play for player B to pick.

Its use is as a bargaining tool and threat elimination if people put out strong characters early in the game when they might be most vulnerable.

More generally, if a card says "choose and kill a character," you can choose any character on the board, not just one that you control. (You'd usually use such an effect on an opponent's character, not your own - although the option to use it on your own exists since it's not limited, the way Condemned is.)

You have to control a character if you want to attack/defend with it, use it's character ability, or use it to pay a cost ("kneel a character to..."). But when an ability does something "to a character," you are not limited to characters you control - unless it specifically says so.