Stock locations vs. physical locations: You can either group or keep physical locations separate with new stock locations. For example, If all your inventory is kept in one location (stock location) then you will want to group your physical locations under this stock location.

Note: If multiple physical locations are grouped into 1 stock location, then the import must count the total quantity at hand for products for all those locations added together.
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If you select more than one physical location then all physical locations will be added up and one total will display when creating invoices/documents and attempting to add that product.

Here's how to set up the different configurations:

Assigning one physical location for 1 new stock location

Within the stock locations tab, you'll see your different stock locations that you have set up. If you click on the name of any one of them, you'll be able to see which physical locations are grouped/associated with that stock location.

Stock location with 2 physical locations

If one of your stock location supplies more than one physical location, you'll be able to add on multiple assigned locations as in below: