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Mega City is the gigantic, sprawling generic all-city that houses the inhabitants of The Matrix. Mega City is an industrial, gritty environment with sectors of urban decay, factories, and corporate high rises. The city is linked by a series of subways and has an extensive subterrainian sewer/maintenance system.
Mega City is very loosely based on the real world city of Chicago, as its' creators, The Wachowski's are from that area and references to streets, avenues and landmarks can be found. As the Matrix movies were filmes in Australia, there are also a lot of street shots from Sydney, including the famous phone box that Neo flies away from in the first film, and that Smith destroys in Revolutions.