Reddit app has no permissions on my phone, but the feed suggests communities based on my location never the less. I've been traveling for the last two months, every city I've been has been suggested
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It’s just an IP look up. I travel a lot and you can tell where certain podcast episodes were downloaded based on dynamic ad insertion
Just check https://ipinfo.io/ to see how close your IP points to your location. For most targeted content the city is good enough. And honestly if I'm one of 1 million people it's ok.