Although this phrase is also used of Jerusalem (Rev. Rev. 11:8+) and of the heavenly Jerusalem (Rev. Rev. 21:10+), here it is to be identified with Babylon (Rev. Rev. 14:8+; Rev. 17:18+; Rev. 18:10+, Rev. 18:16+, Rev. 18:18+, Rev. 18:21+). This is evident from numerous close parallels between what is said of the Harlot in this chapter and the city Babylon in the next chapter. The primary piece of evidence that the great city, in this instance, is to be taken to describe Babylon is the earlier name which was seen written upon the Harlot and clearly associates her with Babylon (Rev. Rev. 17:5+). Some argue for identifying the phrase that great city here with Jerusalem:
One of the stronger arguments used by Jerusalem proponents involves the identification of the phrase the great city as used in Revelation Rev. 17:18+. Jerusalem advocates contend that the only way to properly identify this city is to observe how the phrase the great city appears earlier in Revelation. There are only two references to the great city prior to Revelation Rev. 17:18+. These references include Revelation Rev. 11:8+ and Revelation Rev. 16:19+. Jerusalem advocates believe that both are unmistakable references to Jerusalem. Thus, Revelation Rev. 17:18+ must refer to Jerusalem as well.1But such an identification ignores extensive and close ties between the woman and the city of Babylon. When one considers that chapter divisions are not part of the original inspired text and takes chapters 17 and 18 as one unified passage, the similarities between the woman and the city are compelling. Add to this the fact that Jerusalem is destined to be restored (Isa. Isa. 62:1) and serve as the capital of the Millennial Kingdom, whereas Babylon is never to be inhabited again, and the idea that the phrase that great city describes Jerusalem is untenable. See Babylon is Jerusalem?. The Great Harlot is identified as the great city Babylon much as the Lambs wife is identified as the holy Jerusalem:
The Chaste Woman of the Apocalypse is also indissolubly united to a city. In Rev. Rev. 21:9+ we read that one of the seven angels said to John, Come hither, I will show thee the bride, the Lambs Wife. And immediately following we read, And he carried me away in the spirit to a great and high mountain, and showed me that great city, the holy Jerusalem, descending out of heaven from God.2reigns over the kings
Βασιλείαν ἐπὶ Βασιλέων [Basileian epi Basileōn] . She exercises royal power or rule over the kings. Again, we see the impossibility of assigning Jerusalem as the Harlot. How can Jerusalem, of all cities the most trampled and occupied, with the least political influence and material resources, be said to have historically reigned over the kings of the earth? Others suggest Rome as a candidate for the great city. Although we recognize the unmatched influence over kings of the earth that Rome has had in more recent history, she provides neither the necessary historic scope nor proper fulfillment for the many OT passages which speak literally to Babylon. As old as we may consider Rome to be, she is a relative upstart on the stage of Biblical history which spans back to the tower of Babel (Gen. Gen. 10:1, Gen. 11:1). Rome is merely one of Babylons most prominent daughters. See Babylon is Rome?. Some may object that it is difficult to see how literal Babylon could be considered as reigning over the kings of the earth when she is so insignificant in our time. Yet, as we have seen, the woman is identified with a specific historical city of prominence in the past, and we believe will be of prominence again in the future. Between her initial rebellion as Babel and her final flowering of godless humanism as the rebuilt Babylon, the site of her former splendour lies largely forgotten. But her influence, as the mother of harlotry and abomination, is as active today upon the peoples, multitudes, nations, and tongues as ever. Her humanism, idolatry, and fornication are alive and well, having been disseminated among the kingdoms of the earth. We believe a time is coming when Wickedness! will be carried back to the place of its original manifestation after the flood to build a house for it in the land of Shinar; when it is ready, the basket will be set there on its base (Zec. Zec. 5:11). See Back to Shinar.
1 Andy Woods, What is the Identity of Babylon In Revelation 17-18?.