Geo Zone is zone customization that used in calculating shipping fee. You can add multiple countries and states into one Geo Zone in order to customize your shipping methods.
For example, you have physical store in Penang and you offer Pickup from store to the customers from Penang. Then you have to create a Geo Zone that only includes Penang and apply to Pickup from store as Shipping Method.
Access: Settings -> Localisations -> Geo Zones
Click Insert button to create new Geo Zone.
Fill in the Geo Zone Name and Description. Then, click Add Geo Zone button to add new Geo Zone. Choose the Country and Zone that you wish to add.
Click Save button to save the changes. Then, you can apply the Geo Zone to the Shipping Method from Settings -> Shipping.