Hi Keith,
If you would like to have every City and Zipcode available, the database would have enourmous number of records which are.not used. Usually I don't activate the validation options. The zip code validation was mandatory in previous versions of AX resulting in maintaining or pre loading the options. In the Netherlands it is e.g. possible to buy a subscription to get updates. The Dutch system contains more than 640000 records. There are not many companies using them all for their addresses.
I'm aware that some countries require a City validation. In that case you have to turn it on, but it is then validating for alll countries. So I'm missing the option to validate per country. When the validation is turned off, wrong information might be entered.
At companies where the zipcode is validated, they sometimes choose to do the setup as they have to enter a new code. Then you can setup an alert rule for someone to check data quality.
So you gave some considerations now. There are more options possible. Please verify your thoughts by asking new questions if you would like to have more specific input.