Nowadays, they tend to go by demographics, which may be based on anything from race to income to level of education. Often those demographics are compiled not only through exit polls done at theaters, but also by tracking both ticket sales at the box office and video rentals and sales later on. If certain films sell or don’t sell, tracked by genre, leading actors, subject matter, MPAA rating, director, producer, and/or studio, not to mention theme (which could probably be lumped in there with genre) then that’s how they base their marketing. Every audience is a “target audience” and filmmakers and distributors know that. In their minds, a chick-flick like YA-YA SISTERHOOD might play fine in the northeast or southwest, but probably not in the deep South. Something like PRISCILLA, QUEEN OF THE DESERT might only go to theaters in major cities with a viable Gay community, but a film like IN & OUT, another Gay-themed movie but with more mainstream appeal, might play in not only the cities, but the Bible Belt as well, since that’s where the story takes place and the characters reflect the people of that region.
In short, films are shown in those places where the distributor has the best chance of a return on the cost of the production. And that’s based upon the viewers who live there, and their tastes.