Real Place Allusion

When choosing a location to set a fictional work, an author has a few possible choices. Choose a real place and play this straight (for instance, NYPD Blue is expressly New York City and Cheers is distinctly Boston). Choose an entirely fictional place (like Alice in Wonderland). Choose a generic place name like Springfield, which belongs to multiple towns and could be Anytown. Or, lastly, use a Real Place Allusion to create a town which purports to be fictional -- but which is actually an obvious caricature of a real place under some other name (Bland-Name Product style) or a composite of multiple, identifiable real places.

Sometimes the real place being alluded to is only disguised thinly, much as the Ink Suit Actor hides a real person under a very thin disguise. A Real Place Background of some iconic sight (or site) may be used to deliver a clear spatial cue. Conversely, sometimes the idea that this is a "fictional place" is used as Artistic Licence to rebuild the place in some larger-than-life manner or to create a fanciful composite of multiple real places and landmarks.

A form of Reality Subtext, this differs from the Actor Allusion tropes where the allusion is to one of the stars of a work, or that actor's prior roles.

If the work tries to deny the connection to the real place, such as by leaving contradictory clues to its location, No Communities Were Harmed in its creation. If the setting's location is hidden so well that the allusion is completely lost, that's Canada Does Not Exist.

Conversely, if this merely renames an existing city with nothing else changed that's Istanbul (Not Constantinople) and, if a place goes through a formal change of name in-universe that's Please Select New City Name.

Anime and Manga

 * In the Dance in the Vampire Bund manga, one of the Bund's underground levels was precisely made with appearance of Tokyo, but vampire safe lights to simulate sunlight.
 * It was made for those that are homesick.

Comic Books

 * Metropolis from DC Comics was originally intended as a thinly-disguised version of New York City, as was Gotham City. Both have become disconnected from their "real" counterparts over the decades, and have floated about the DC version of the United States.

Film

 * "Baxter Falls" in It's a Wonderful Life is modeled on various real locations in Seneca Falls in central New York's rural Finger Lakes region.
 * "Delta City" in RoboCop is intended to be a fictional placeholder for a Detroit of a dystopian future – although the film itself was shot elsewhere.
 * "Radiator Springs" in Cars. Oklahoma historian Michael Wallis led Pixar's crew on research trips over a 1200-mile stretch of the former US Route 66 through many little places from Baxter Springs, Kansas to Peach Springs, Arizona before they created their cartoon caricature village as a composite of multiple real places. The fictional town's location (in the map in the flashback) matches Peach Springs, but there are so many references to individual landmarks, people and businesses in every town along the way that Wikivoyage makes an entire itinerary of this.
 * "Ornament Valley" is Monument Valley in northern Arizona – the same iconic scenery often seen in historic Westerns
 * The "Motor Speedway of the South" is a larger-than-life version of a NASCAR track in Bristol, Tennessee.

Literature

 * The "Hundred Acre Wood" in the Winnie the Pooh stories is based on Ashdown Forest (and the adjoining 500 Acre Wood) in the United Kingdom. Winnie is named for a real bear, unofficially the mascot of Canada's World War I mounted Fort Garry Horse regiment, who in turn is named after Manitoba's capital city Winnipeg.
 * Xanth is (currently) an analogue to Florida. In earlier eras it mapped onto other regions.

Live-Action TV

 * Mayberry, North Carolina from The Andy Griffith Show and later Mayberry, RFD was based on Pilot Mountain, North Carolina according to Griffith himself.
 * Walton's Mountain from The Waltons is based on creator Earl Hamner, Jr.'s boyhood home of Schuyler, Virginia.
 * Starling City from Arrow isn't an Expy of any one city, but anyone studying the Stock Footage used to depict it will realize that it's built out of Hollywood Geography, with locations from upwards of a half-dozen different real cities all stitched together to create one fictional one -- and making it possible to go from, for example, Center City Philadelphia to a Baltimore slum in a matter of blocks.

Video Games

 * "Liberty City" is a copy of New York City in the Grand Theft Auto series. Other thinly-disguised real place allusions include "Los Santos" (Los Angeles), and various individual LA neighbourhoods under slightly-modified names (so "Vinewood" instead of Hollywood, for example). "Vice City" (Miami) is named as an implicit allusion to the 1980s Miami Vice TV series.
 * "Millennium City" from Champions Online is an alternate-universe version of Detroit.
 * Averted by Paragon City in City of Heroes. Although explicitly placed in Rhode Island, it doesn't correspond to any actual city or town in the state.  (In fact, the latitude and longitude canonically given for it place it in the middle of an undeveloped swamp in the real world.)