Freddie refused to say who the lyrics were actually about and was very self critical later on about them
"I think my melodies are superior to my lyrics. "Death On Two Legs" was the most vicious lyric I ever wrote. It's so vindictive that Brian felt bad singing it. I don't like to explain what I was thinking when I wrote a song. I think that's awful, just awful. When I'm dead, I want to be remembered as a musician of some worth and substance." but Queens first recording label Trident's Boss Norman Sheffield thought they were about him
"One song on the album causes Queen some problems though. "Death On Two Legs" is dedicated to an anonymous person and the lyrics are quite scathing. Norman Sheffield believed that the lyrics are about him and threatened to sue Queen and EMI. Queen refused to be moved by his threats, however EMI settled the situation out of court - rather than let the situation escalate." Quotes in italics lifted from the following sources: http://www.geocities.com/SunsetStrip/Stadium/5025/CIRCUS.html
http://www.queenzone.com/resources/biography/1975.htm