Looks like sockysocks is linking to another team's discussions and I'm guessing it's set to Private so we'd have to members of that team to view it.
In fact when you go to Etsy's home page and search, it does search everywhere. The regional box appears on the left after you've done your search. Mine had "Grantham, UK" in there but when I search again, I was still getting worldwide results. I can see why people think that it's only searched for items in Grantham but honest - I was getting worldwide results.
Those filter boxes only come into play if you type anything in it to change it and it's easy to change back to everywhere afterwards. I find it quite useful if I want to find things just in the UK to cut down shipping times.
It's just the fact that the box has a regional suggestion ready-filled in which seems to be confusing people (and I can see why) but quite a few websites use this as a means of user-controlled filtering.
By default, Etsy searches the world for what you want and then you can refine it regionally - but only if you want to.
I don't think it's a problem personally.
