Imagine how your customers think when they are looking for a business like yours. If your business is very local, then you may use Tags that include your town, surrounding towns and perhaps your nearest city.
If your customers are less geographically confined, then you’ll also want to add tags for your region, county, state, perhaps even your country.
Think about it this way, if you own a nail parlor in Paris France will your customers be looking for “nail parlor in France”, probably not, they’re likely to think more locally, for example “nail parlor in Paris”.
On the other end of the scale, if you’re a yacht broker, might your customers naturally search a little more widely, say “Yachts in Europe”.
You can get some ideas by just looking at a map of where you do business. Or, you may consider using similar tags to your competitors, but of course by doing that you are missing out on the chance to be unique, sometimes very niche specific tags can work best.