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It isn't just latency, but "triangulation".

  [IPinfo] pings an IP address from multiple servers across the world and identify the location of the IP address through a process called multilateration. Pinging an IP address from one server gives us one dimension of location information meaning that based on certain parameters the IP address could be in any place within a certain radius on the globe. Then as we ping that IP from our other servers, the location information becomes more precise. After enough pings, we have a very precise IP location information that almost reaches zip code level precision with a high degree of accuracy. Currently, we have more than 600 probe servers across the world and it is expanding.
u/reincoder, https://www.hackerneue.com/item?id=37507355

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