Purpose of geoip Data file

Just provision of the country-based filtering, nothing more. As usual, actually - it's not Tor-specific and that's what the GeoIP for. A hint for you: you can purchase the paid subscription from MaxMind for GeoIP and try to feed these files to Tor - and the accuracy improves greatly

Since you're new, the first place to find the answers to your questions is to check is the documentation page.

From the Tor Manual: "A filename containing IPv4 GeoIP data, for use with by-country statistics."