In the huge world of Internet and Search Engine Optimization, location is important while displaying search results. Search engines are designed to bring relevant results to users in the area of keywords, sites as well as in correct language. It obviously does not make sense if a Spanish individual keeps on getting websites in search results that are written in French or Chinese. Therefore, it is important for search engines to be able to return search results in the right language depending upon the user and also bring the user as close to his country/state/province as possible with the help of search results.
Many people work hard to optimize their website for their own country but often find it difficult to get good results. Surprisingly, in some cases they find good rank in a search engine i.e. based in another country or even another continent. You can say it is impossible, but the reason behind this is that many times even the owner of a website is unaware about the country in which his/her website is hosted.
Google and many other search engines determine the country of a website not only with its domain name, but they also read the IP address of the website and determine its physical location depending upon that. For example, if you want to optimize your website to rank well in search engines based in the USA, you will find it difficult if your website is hosted in Japan or Spain. You can thus move to one of those web-hosting companies, who have their servers in the USA.
There are many online tools that can help you find the hosting location for your website as well as tell you the possible reasons for poor ranking in a particular search engine. It is always better to understand the reason and do something about it rather then working hard to optimize your website to rank well in a country.