I don’t believe you can dynamically filter the choices of one custom field based on the current choice of another, and change that choice on the adminend. You can filter the choices that show up in your fields with a query modification that’s very similar to WP_Query, and I’m pretty sure that can’t be done on the fly.

I would almost cheat and instead of making posts with taxonomy assigned to them, include both the locality and the location in the post name itself.

So say, post [Museum of London] with taxonomy [London]

would become

[London][Museum of London]

[London][Hyde Park]… etc

or something similar. I’m presuming you only want to assign one location to any specific locality…

Then I’d create a relationship field and whenever I’m looking for Museum of London I’d type

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