Country-code top-level domains (ccTLD) can help users have a clue about the location of a website. Almost all users know that ".de" domains are from Germany, ".co.uk" from UK, and so on. But many webmasters register top level domains like .com, .info and .org, which are hard to target by users. So Google added region information, supplied by webmasters, to the green address line on some search results.

For example you're searching for a boxing club in Canada called "Capital City Boxing". A quick search on Google for "capital city boxing" provides you the following result:


But how can you tell which one is from Canada? You can't. None of the results gives any location information, nor do they have a regional TLD (.ca for Canada).
The best way to find the result you're looking for, would be to refine your search, and search for "capital city boxing canada".
But now, with Google's Region tags, you can find valuable information about the website's location, in the green URL line, without redefining your search:


You can see that the fourth result now includes the region name "Canada" after the URL, so you can tell that this result relates to the boxing club from Canada. With the new region tags, you will no longer need to refine your search, or click through the results to figure out which page is the one you're looking for.
If you are a webmaster, you can control region tags from Google Webmaster Tools, by adjusting your Geographic Targeting settings ( from Site configuration > Settings > Geographic Target). From there you can associate a country/region with your website.