While this is certainly possible, it would require a significant amount of work. First, you would need to impliment and maintain a Geo-IP database (unless you want to trust a user's county/city entry). Then you would need to modify the database queries for every item you want filtered this way throughout the system, to limit results to items that have an extra database field for the region.
Which also brings up such region tagging. Depending on the region diversity and size, you would need a list that people can choose from, or make it automatic based on the poster's region. IE: Poster is from Canada, content is automatically tagged "Canada" when the user uploads, and shows only to people who also have that tag.
A couple of points worth noting, apart from the monumental amount of coding required to modify every mod, and plenty of core code to achieve this, is that this would also make a site very difficult to get started, as every region would have it's own very limited content on a site that may have enough members to provide a very rich experience & content if not segregated. The counter-perspective to this might be; if you start the site as one region, and then expand, this should overcome such a difficulty. Not so, as regionalizing the system after-the fact introduces two more problems. First, you would need to regionalize everything already posted (you could do this automatically based on the poster as that was still tracked, using a conversion system when upgrading to this new scheme), but even more, you would have a site that has reached a rich and full content level, that suddenly is broken up into many tiny pockets of dead space, especially for slow regions.
And all of this is made even more difficult if you want to introduce an option for members to also browse outside of their region separately.