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When I first began the game, I didn't think my starting city would be considered the city that my character lives in/pledges citizenship to and state such on my profile, and henceforth be referred to as someone originating from that city-state. For roleplaying purposes and for those who desire a little consistency with their GC allegiances, I think it would serve as a good function to let players choose their City-State or change it at some point in the game.
This was all on the web site before the game came out. I was looking at that daily just because nothing else to do when beta was not currently running. I see how this could be confusing to someone that does not do stuff like that and read everything...but it was there. I guess they should make it a little more clear for some players.
Ironically FFXIV version 1.0 allowed the player to choose which city state they started in (and thus allegiance), hence when I started 1.0 I started in Gridania but as a GLA. ARR changed this by restricting things that what city state you start in was determined by the location of your starting class's Guild - this is because the early tutorial quests involve joining up with that Guild and learning the ropes in that class. It's a result of the game's design (especially at the start) being more tailored to new players, particularly those who have never played a MMO before.
Besides, from a lore perspective, your character isn't actually from that city anyway - they're a foreigner who arrives there and becomes an adventurer. If this contradicts what you've developed for your character's backstory, just ignore the 'citystate' listing on your character information and say they're really from somewhere else, or even just say that they're "currently employed by <insert citystate name here> but are really from another citystate", or something.
That's a really good idea, Enkidoh. Gotta work with what you're given! :o