This authentication method operates similarly to password except that it uses BSD Authentication to verify the password. BSD Authentication is used only to validate user name/password pairs. Therefore the user's role must already exist in the database before BSD Authentication can be used for authentication. The BSD Authentication framework is currently only available on OpenBSD.
BSD Authentication in PostgreSQL uses the auth-postgresql login type and authenticates with the postgresql login class if that's defined in login.conf. By default that login class does not exist, and PostgreSQL will use the default login class.
To use BSD Authentication, the PostgreSQL user account (that is, the operating system user running the server) must first be added to the auth group. The auth group exists by default on OpenBSD systems.
Read the upstream documentation. For corrections, first check the current version.