Cart: Shipping methods / Regions

I can’t quite understand the logic for the three selectable “Region” options under shipping methods; and why the customer needs to select a country in the check out area.

I’m based in UK and simply want to offer free postage to UK customers and a flat rate postal charge to all other countries.

I’ve created two new “Shipping methods” which I’ve called “Delivery within UK” and “Delivery to outside UK”.
On checkout, if a customer selects Delivery country as US, then they are presented with only an “outside UK” shipping option. All good.
If a customer selects delivery country as UK, they could select “delivery within UK” (good!); or “delivery outside UK” (not great as customer will be overcharged - unlikely though as I’ve set “within UK” as the default).
If a customer selects delivery country as Uruguay they are offered “delivery within UK” = free postage.
I’m used other shopping carts determining shipping price based on location of customer, but I can’t see how I can configure BL to differentiate between UK-based and other non-US based customers.