Citation systems often specify writing down the location (e.g. London) that a book/paper was published, how important is this, and if it is important, then why is writing down the publisher/journal name not enough?
The idea is that when you cite someone else's work then you make it reasonably easy for any reader of your work to verify your sources. That means that you need to cite precisely the work that you used. It sometimes happens that "Smith on XYZ" went through several editions, some of them published in different places. It is unlikely that you will always know all the places in which a work you cite has been published, or whether there were any changes in the editions published in all those places. So traditionally you just quote, precisely, where the work you used says it was published.
All the above is still true, but it has to be admitted that the world of electronic publishing has made matters less straightforward. In the early centuries of printed books, printers sometimes wanted to boast, and sometimes were legally required to state, where the printing press was that produced the work in question. Nowadays, however, there might never have been any kind of printing involved other than the reader's own computer printer. The guiding principle nevertheless, remains: cite your references with sufficient precision to enable an interested reader locate them. For example, one often sees references to websites. It is good practice to include some such statement as "accessed on [date]" but even then website references can often prevent a reader following up your work.
I've generally omitted the locations of publishers in the bibliographies that I prepare. (When co-authors assemble the bibliography, I go along with whatever they want, as long as it's consistent.) I haven't (yet) gotten any complaints from editors or publishers about the missing locations.
Looking at the situation as a reader of other people's papers, I don't recall ever being hindered from finding a publication because the publisher's location wasn't given, nor do I remember being helped by the location when it was given.