Natalie - thank you for all this information. Many of us are very clearly interested in this area, and some of us are irritated by current Geni behaviour here (rightly or wrongly).
Maybe there are several issues here:
1. Some place names dupes are complete bugs; some may be appropriate.
2. Most people look at Łódź, Łódź, Łódź Voivodeship, Poland or Kenosha, Kenosha, WI, USA and don't get it. They look wrong, whether or not they are wrong. Most Geni users will never see this discussion. There may be some way to improve the presentation in the profile.
3. The information is all there in Edit Location Details, but most don't look at that. rvk's issue is I think really that it's not WYSIWYG - what you see is NOT what you get. You see one thing in the data entry/edit screen; another on the profile. In fact, if you hit edit location details before you save the changes and after you have entered the location, you can see what you will get, but again most don't know that.
4. Current vs historic place names. As Natalie says, there's a value to using the Google Maps current names, even if they are not historically accurate. Natalie - are the Latitude and Longitude data preserved if you edit location details? eg if you change London UK to London England because at the time the UK had not been created? Or edit Zimbabwe to Rhodesia? Or vary St Petersburg vs. Leningrad etc for historical accuracy?