Only a Project Organizer can edit locations. Once edited, the change will be made for all future and past posts. In other words, if you change the spelling of a location, or make it a sub-location, that change will be retroactive to anything your team has posted previously, as well as what users will see for new posts they are creating.
Here's how to do it:
Click the gear icon in the project name from the top of the web app (only Project Organizers will see the gear icon).
Select Manage Locations.
Click the wrench icon next to the location you'd like to edit. You'll see options to rename, duplicate, move, deactivate, or reactivate that location as needed.