With AdWords, you can target your campaigns to show only to potential customers in specific countries, regions, or cities. And since we show ads based on a user's internet protocol (IP) address, you may not see your ad if you don't target your own geographical area. To see your ad as it would appear to a potential customer in a specific region, you could hop on a plane -- or simply check out our improved Ad Preview Tool.
Let's say you want to know what happens when someone in Toronto, Canada searches www.google.ca for "flowers". When you enter those parameters into the Ad Preview Tool, we'll show you the exact search results page you would see if you were actually in Toronto. What's more, you can use the Ad Preview Tool without accruing extra impressions for your ads. Feel free to try as many keyword and location combinations as you'd like, and watch your ads as they travel across the country and around the world.
You can also read more about how AdWords decides where to show a location-targeted ad here.
Source:→ AdWords Blog