If you have the WiFi-only iPad (which does not have GPS) your location is determined by the mapped location of nearby WiFi routers.
Without GPS location-finding is done by using a Apple location database which contains the MAC addresses of routers and their physical location. A MAC address is a unique number which is built-in to all network devices when manufactured.
The Apple database is built and updated by Apple GPS-enabled devices (primarily iPhones) actually seeing routers and then adding/updating the router's locations into the database. Apple does not provide an user-accessible interface to manually update the database.
Note that to be used for location determination, a device does not need to be actually connected to a router, it just has to see the router. More precise location determination can be done if several nearby routers can be seen. When a router is moved from one location to another erroneous locations can sometimes be reported until the router's location is corrected in Apple's database.