I'm not an expert on authorization configuration. iControl uses the same authentication mechanism as the GUI. If you can configure a user in the GUI as local when you are using remote authentication then iControl should be able to use it.
I'd suggest contacting F5 Product Support for product configuration questions. I'm sorry to pass the buck but I'd rather you get correct information and product support is the correct place to go for product configuration questions at this point.
We'd be glad to help you out with API usage questions though, so if any of those come up, please do let us know...
-Joe