Gold Nitro location targeting is based on the locations that people tag in their posts, which isn't always where they really are. What's more, hashtag and account targeting is an OR and an AND with the other targeting options.
For example, if you set a location target, we'll sometimes interact with people who post to that location, or sometimes choose a hashtag, but we don't look at hashtags that only have those tagged locations.
We do this because we need a high volume of Instagram accounts to interact with, and narrowing targeting to only specific locations does not have enough volume. Many posts to Instagram are not tagged with a location.
You should have only 1 to 2 location targets that represent your primary geography, such as a specific city.
You can also refine your target hashtags and target accounts to more closely target a specific location. Be careful not to limit your targeted audience too much, though, or it will also limit growth.