Google has recently changed the UK targeting to include a British sovereignty (military bases), Akrotiri and Dhekelia both located in Cyprus, which is odd due to this being part of British Overseas Territory since 1960. Nobody knows the reason for why this is yet and Google is being very guarded about their rationale behind adding this to the UK targeted. We would like imagine we will see something appear on Inside AdWords soon.
In these two locations on the island, there is rough 7,700 Cypriots and 8,000 British military personnel and their families. So while a small location it should not be dismissed. It is worth thinking about your business requirements before excluding these locations for your AdWords location targeting, for instance, if your business supplies landlord insurance for UK mainland, it is very possible these users have a UK based property they are looking to rent out.
For the time being, we are going to leave our PPC campaigns targeting this area until we have significate data for each account to exclude the location.