Many more people are using VPNs these days. It's still not a large percentage, to be sure, but people are indeed doing it. Hell, I'm on my company VPN right now, and this site mis-identified my location because our VPN is set up to route most addresses in AWS's address space through the VPN (and ipdata.co appears to be hosted on AWS).
Then you have stuff like people on planes (usually this is all routed through a single PoP somewhere), people on mobile data who are roaming internationally (often proxied through one of the home carrier's PoPs), etc.
I think using IP geolocation is a decent first-order approximation, and is useful if there are no other ways to get that information, but it must always be treated as unreliable.
Meanwhile, there is API to detect VPN, so that we can aware that the geolocation is good up to the server physical location.
Indonesia -- 47%
Thailand -- 39%
Brazil -- 36%
Turkey -- 36%
UAE -- 36%
Viet Nam -- 35%
Saudi Arabia -- 34%
India -- 32%
Malaysia -- 32%
...
UK -- 14%
US -- 14%
Here is a better version of it: http://cdni.wired.co.uk/1920x1280/g_j/infopornhorizontal_1.j...
Wikipedia says that Indonesia has an internet penetration rate of 50%. It might be reasonable to assume that a low penetration rate means that a significant amount of the internet access is happening in a work place rather than in a residential place. If a significant amount of access is happening at a work place it might also be reasonable to assume that a lot of that access is happening over a VPN.
https://en.wikipedia.org/wiki/List_of_countries_by_number_of...
Don't get me wrong. I totally agree that this thing is definitely not accurate(it thinks i'm 1300mi away) but it's good enough to get a general idea.
[1] made up number to get my point across