Yesterday, Google proposed several changes it would like to see made to the DNS system. Chief among them is an adjustment to the protocol that would give authoritative DNS servers the ability to see your IP address. Currently, these name servers can only see the address of your ISP.
The change would allow websites go better tailor content to their users by knowing their approximate location. A person living in Los Angeles, for instance, might be able to visit Google News and instantly get news related to the city without ever configuring his location on the site.
To ease privacy concerns, Google has suggested that as little of the IP address be shown to the DNS server as possible. In layman’s terms, the site might see only the name of your neighborhood or town instead of your home address.
Source | ArsTechnica