Now, you have the option to further refine location targeting. Advertisers can now target by either physical location and search intent, or both. This is especially useful for types of businesses who find that they get lower value clicks from outside their target physical location, or for city names that exist in multiple different states. Springfield, for example, is a city in several different states in the US.
To enable this feature, go to your AdWords campaign settings and under 'Location Targeting' click on 'Advanced location options.'