By default, Google and Bing will target users that are interested in your target location as well as people that are actually in it.

AdWords-Users-In-My-Targeted-Location

Unless you have a special need to target people not actually in your target area (e.g. hotels and airlines), we recommend targeting only “People in my targeted location”. The default setting generally spends about 10-15% of ad-spend on visitors that are more than 100 miles from your target area. (Why might Google think that someone 100+ miles away from you is interested in your area? Google uses their search history and past user locations, so a tourist that has previously been to your area or follows a sports team or university in your area might be targeted for your searches unless you pick the correct setting).