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1) An area north of the suburbs of the largest city in a state in which the city is at the southern end of the state; used especially in New York State. In NY many people take it to offense to have their hometown labelled "upstate."
2) The northern end of a state, used mainly in states where the more urbanized area is to the north, like Illinois or Delaware.
Chicago is in upstate Illinois.
If there are less than 3 cities or villages within a 20-mile radius of your address with a population of less than 30,000, you are upstate.