"Knowledge (local) is basically skill at gossip. It will work in any town following a successful Gather Information check – DC 10 for a hamlet, DC 35 for a metropolis."
I would agree with having knowledge (local) work for whatever location the player happens to be at, with the rationale that he has spend his spare time gathering more knowledge about his new location.
It hardly makes sense that, if you're adventuring across the seven seas and put more ranks in knowledge (local), that you've suddenly become more knowledgeable about your home country of Florin despite not having set foot there for years.
Knowledge Local is essentially like Knowledge Geography except on a "local" level. Think of it as if you've read not only about the New England states, but specifically on New York city. You've read (or heard) about the local establishments, the city's politics, famous people who live there, good places to eat, when it was founded, last time the city was sacked, etc.
Sure it does! As you travel more of the world and learn more, you better understand things you didn't understand before.It hardly makes sense that, if you're adventuring across the seven seas and put more ranks in knowledge (local), that you've suddenly become more knowledgeable about your home country of Florin despite not having set foot there for years.