Is IP-based location accurate?
Not entirely. IP geolocation estimates your city or region, but rarely your exact address. Accuracy depends on your provider: sometimes it points to the city where their network node is, not where you physically are. It doesn't reveal your home address.
Why do websites know where I'm from?
Every time you visit a site, your public IP travels with the request. Services cross-reference it with geolocation databases to show content in your language, prices in your currency or your local weather. It's the same technique we use here.
How do I hide my location?
A VPN swaps your visible IP for another server's, showing a different location. Note that private browsing mode does NOT hide your IP — for that you need a VPN or proxy.