“Our goal is to provide a few more options to API developers (and the users they are servicing) through this contextual information. people, we find, inherently want to talk about a “place”. a place, for a lot of people, has a name and is not a latitude and longitude pair. (37.78215, -122.40060), for example, doesn’t mean a lot to a lot of people — but, “San Francisco, CA, USA” does. we’re also trying to help users who aren’t comfortable annotating their tweets with their exact coordinates, but, instead, are really happy to say what city, or even neighborhood, they are in. annotating your place with a name does that too.”
Sounds like a minor detail, but it’s actually quite important, because it gives Twitter the ability to compete with location-based services such as Foursquare or Gowalla, which let you check in at various locations and share them with your friends.