Translation:This city is in the center of a large region.
I am aware of the connotation, however why not look at the simple denotation?! By the way in esperanto words also have a connotation and a denotation. Granda could mean "glorious / grand / famous / powerful / eminent / etc." but it could also mean "big/large". e.g. "Li estas granda arkitekto" would is most cases mean something like "He is a glorious / grand architect". However it could also mean "he is [physically] a big / large architect." 'Great' would cover all of the usages mentioned above (and more).
Yes, of course, why bother, Duolingo can't cover all possible translations, so sometimes translations are not accepted. I knew that before I ever used the app. It's just a computer program. Nevertheless, it sometimes leads to some minor frustrations and possibly an odd rhetorical question posted on a discussion page. (...)
(And by the way, I like some ambiguity! Isn't is 'great' that a word or phrase or maybe even a whole book can have more than one meaning!)