An IP address is assigned to a particular company - i.e. a web hosting company or an ISP (for example: BT, Virgin Media). When anyone connects to the internet, they're assigned an IP address - which may be "dynamic" and change each time they connect, or remain "static" and not change.
There are exceptions, but generally speaking an IP address would generally belong to a particular household, business or web server. It may change over time.
There are geo-location databases which will try to match up the location of an IP address to an approximate area. They are reasonably accurate, i.e. it'll almost certainly get the country correct, but it's hit and miss if it'll get the town correct.