Change user permissions

Hello, i´m making a social network for students, and i change somethings in register information and user permissions but i dont know how to do that and where(files).

What i want to do is when user register choose the city they study, and when to chose who will see some information like, friends, all people etc.. one option to choose poeple who live in that city.

what i want is to put the people from the same city connected.

 

thanks in advance