The exact location of Ponyville isn't known but it is inland of the western coast of Equestria. It is near a region called the Rainy Coast and is within a short train ride to Seaddle. The town is close enough to Seaddle that they support the Seaddle Reign sports team. It is located east of Fort Vanhoover and Dockland and is near Lake Altai.
The area is heavily forested and surrounded by mountains and is very reminiscent of the American Pacific Northwest. A river runs through the town, which is thought to be a tributary to a larger river just to the south of town which flows towards Fort Vanhoover. The town may be located within a gorge region as the local highway that runs through the town is called the Cascade Gorge Highway (Route 14) as seen in the episode, "Location, Location, Location."
The climate of the region seems to be cool and wet. It is often raining or cloudy with sunshine being the outlier. Autumn seems to have a good mix of fall colors but there are several evergreen, spruce, and pine tree's keeping things green. Winters seem to be wet with a few occasional days of snow. Spring is cool and wet with a wide range of flowers. Summers seem to also be cool. The few times temperatures have been shown in the summer within the series, they are rarely higher than 70F degrees.
Ponyville is the county seat of Mare County and is a mid-sized town east of Fort Vanhoover, which is a bigger mid-sized city. Ponyville has a mayor and city council government. The town has it's own municipal police department, and fire department. There is also some schools and the Mare County Community College which is a smaller college. The town has a hospital.
There is a courthouse for the county which also has a sheriff's office and other government services for the county.