What is Google Ads ( AdWords) Geo-Targeting?
It is targeting visitors according to their geographic location determined on the basis of their IP, Wi-Fi and GPS data connectivity. The visitors are served location specific content based on their geographic presence like country, city and state. It looks simple but the process is complex in nature.
The best way to understand geo-targeting is to study SERPs
If you search restaurants near me, you will get the eateries available in the area where you are and the results would change with change of location.