Google’s paramount goal is to provide the users with most relevant search results. Today 1 in 5 searches on Google is related to location, so providing locally relevant search results is of utmost priority. Till now the country of service was indicated by the country code top-level domain name (ccTLD). For example “google.co.uk” for United Kingdom. But from now on, Google will determine the country of service based on your location. If you’re in UK, even manually typing “google.com” and searching something will not fetch you results from USA, instead it will show results based on your current location, i.e. UK.
However, Google has cleared that they have just changed the way they labeled Google search results and maps, and not the way it works.
In case your country of service doesn’t change as per the location, you can update it by going into the Settings > Search Settings in the footer and then navigate to Region Settings.
From the Google Search Blog:
So if you live in Australia, you’ll automatically receive the country service for Australia, but when you travel to New Zealand, your results will switch automatically to the country service for New Zealand. Upon return to Australia, you will seamlessly revert back to the Australian country service.
Google is hopeful that this update will ensure that the users will get the most relevant search results, and will ultimately improve the overall search experience.