Privacy is pretty important, but even when you're careful to not leak your info publicly, researchers can still figure out where you are pretty easily. Ars Technica explains how.
Researchers from IBM created an algorithm that predicts a Twitter user's location. It's only 58% accurate, but that's still significant. Here's how it works:
While geotags are the most definitive location information a tweet can have, tweets can also have plenty more salient information: hashtags, FourSquare check-ins, or text references to certain cities or states, to name a few. The authors of the paper created their algorithm by analyzing the content of tweets that did have geotags and then searching for similarities in content in tweets without geotags to assess where they might have originated from. Of a body of 1.5 million tweets, 90 percent were used to train the algorithm, and 10 percent were used to test it...
The most salient use of location data from a business standpoint would be for targeting ads... it's not implausible that their Twitter actions, even passive ones following other users, could be examined to determine their location.
Obviously, it's not really possible to pinpoint where you are exactly, but it's pretty easy to see how someone can figure out your location by proxy to what you tweet about, who you follow, and what you hashtag. So, if you really want to remain private, be careful what you tweet about and who you follow.