Telling which country you live in is allowed, regardless of the size. Countries have too many people in them for that to give away any useable information. Besides, saying things like, "Woohoo! It's the 4th of July!" or, "I visited Scarlet City Studios and met Goku Ironheart!" kinda give that away.
Timezones are allowed for the same reasons, not to mention it's helpful for coordinating meetings and other events. Did you know as of 2006 that 85,385,031 * people live in the Central timezone? That's a whole lot! In the past, we figured that the benefits of knowing each others' timezones outweighed the potential for someone actually being able to misuse that information. (Same with allowing countries.)
*From Google Answers: "Population statistics by time zone"