For accuracy, geofencing uses a combination of GPS, cellular data, and WiFi data:
In urban environments, where the cell towers and Wi-Fi routers are more dense, geofencing accuracy can reach 100-200 meters. If you live in a skyscraper, geofencing might not work reliably due to GPS inaccuracies. Using the Large radius setting may help.
In more rural areas, where cell towers and WiFi routers are sparse, geofencing accuracy can reach several hundred meters.
To improve geofencing accuracy, ensure your mobile device meets these conditions: