I am starting a free classified ads site for my town, and I just want to make sure I can put AdSense on it. Also, will it raise any flags that all the clicks will be coming from probably a 100 mile radius (depending on ISP locations)?
I don't see any problems doing it. there are many classifieds and directory sites using adsense. good luck
What better place to put adsense ads than a site that people go to to read ads? It's not against Adsense TOS. Just to be on safe side, I recommend emailing google to let them know that most visitors will be local.