When running ads for specific geographical areas you are instructing Google to show ads to people in geographical locations that you configured. However, Google can't always guarantee geo-location, so is not uncommon to see clicks outside of your advertised region(s).
You can block IP addresses and IP ranges or exclude ad placements when they keep sending ad clicks outside or within geographical regions you configure. You can set rules on country and continent level. At the moment, geo location services are not accurate enough to enable city-level or ZIP code level blocking.
How to configure?
Chose the geo-range you wish to to observe (e.g. country) and the source you wish to apply the rule to (e.g. IP range), and switch on the rule. Then configure your threshold:
Make sure to hit "Save Changes" to apply the rule.
How long are IPs/ranges blocked for?
IP addresses will be blocked based on your default IP blocking period configured in Account Settings.
For how long are placements excluded?
Ad placements will be excluded based on your default ad placement exclusion period configured in Account Settings.
Additionally, you can override your default IP blocking / placement exclusion settings and chose how you wish to be notified when rules trigger. You can also apply custom click tags for advanced reporting.