So how would you do it? I notice you didn't write "IP geolocation", just "geolocation", so perhaps you would use something other than the IP information?

It is clear that no matter how smart you are as a developer, IP-only geolocation can't work reliably, simply because of the proxy issue.

It's more a UI/UX issue. You want to make it clear that the guessed location is only a suggestion so people don't get confused if it's wrong. You also want to make it just as easy to change it (if it's wrong) as if you weren't providing the location suggestion at all. Difficult? Maybe. But not impossible.

And really, it's just balance -- maybe some people will still get confused. But maybe the benefit gained by the people who get their location guessed correctly outweighs the detriment of those who get a bad guess and get confused.