Unfortunately this is difficult to do, and close to impossible to do reliably. This often puzzles people, given that the ERA licences expect it and that things like BBC iPlayer are well known to be already doing it. It's a long story...
Because of the way the Internet works it's currently impossible to know, reliably, where the person making a request is physically located. It is however possible to guess, but you need to understand the limitations of this guessing process before relying on it. Whether this guessing process is good enough for any particular purpose is something only people using it can decide.
A common approach is based on Internet Protocol (IP) addresses. When someone requests something from a web server, one of the bits of information that the server sees is the IP address of the computer from which the request came (much as your telephone can tell you the number of the person calling you). In many cases this will be address assigned to the computer the person making the request is sitting at. IP addresses are generally assigned on a geographic basis and lists exist of what addresses are used where, so it is in principle possible to ask the question 'Did my server receive this request from a machine in the UK', or even '...in my institution'.
But there are catches:
- It's possible to route requests through multiple computers, in which case the server only see the address of the last one. This often happens without the user knowing about it (for example most home broadband set-ups route all connections through the house's broadband router, mobile networks route requests through central proxies, etc.), but it can also be done deliberately. Like many organisations, the University provides a Virtual Private Network service explicitly so that requests made from anywhere in the world can appear to be coming from a computer inside the University.
- The lists saying which addresses are used where are inevitably inaccurate. From example a multi-national company might have a block of addresses allocated to its US headquarters but, unknown to anyone outside the company, actually use some of them for its UK offices. Connections from people in the UK office would then appear to be from the US.
Another tempting approach is that modern web browsers, especially those on devices with GPSs such as mobile phones, can be asked to supply the user's location. This is used, for example, to put 'you are here' markers on maps. You might think that this information could be used to implement geographic restrictions. However the fundamental problem with this is that it's under the user's control, so in the end they can simply make their browser lie. Further it's often inaccurate or may not be available (for example in a desktop browser) so all in all this probably isn't a usable solution.
If you can setup authentication such that you can identify all your users then it seems to me that one approach would simply be to impose terms and conditions that prohibit them from accessing content when not physically in the UK, or wherever. You could back this up by warning them if IP address recognition or geo-location suggests that they are outside the relevant area. It seems to me (but IANAL) that this might be sufficient to meet contractual obligations (or at last to provide a defence after failing), but obviously I can't advise on any particular case.
Update July 2014: it appears that the ERA licence has changed recently in line with changes to UK copyright legislation to better support distance learning. This probably reduces the relevance of ERA to the whole geolocation question, but obviously doesn't affect the underlying technical issues.