Geotargeting is the practice of determining a website user's location and serving them content appropriate to that location. The location is usually determined by IP address
Geotargeting is commonly used for a number of reasons by web administrators. One common use by multi-national companies is to show users the correct price and currency for the user's region. For example, a user accessing an ecommerce website from the USA will be served prices in dollars, whereas a UK user would see pounds sterling.
Geotargeting is also common on a more local level. If you go on to Gumtree, for example, you will be served the listings for your local area.
PPC advertisers also use geotargeting to serve location-specific ads.