You can make a parent/child relationship by just putting the relationship between the two post types. You would only assign cities to the nations they belong in within the relationship field.
However, I don’t think that’s what you’re asking for: I think you’re wanting to have these as selection options when creating a new post or on the front-end of your website when filtering a list of information. Both of those situations require AJAX filtering (ie they have to change the ‘child’ options based on the ‘parent’ selection, which means the child can’t have anything in it’s list until the parent is selected.). This is not supported at present under Pods as it requires conditional field choices based on the choices of other fields and fallback options. We’re putting in the architecture to support this in Pods 2.8, but it probably won’t be available until the end of the year.
For front-end filtering like this, you can use FacetWP and just configure a hierarchical taxonomy of countries and cities in the same taxonomy. There are some form solutions that also do this, but they’re add-ons to Gravity Forms provided through GravityView.com
