As others said, the “40%” means they think that 40% of an area will get rain. They cannot be certain if it will be one neighborhood or another though.
And as for what goes into that, weather predictions are based almost 100% on taking the current weather conditions that you have, and comparing it to past data and what happened in the past.
That is how weather models on computers work, they take the current weather data and compare it to DECADES of data that has been collected. So if the computer sees that condition XYZ is happening now, and that if the past 10 times XYZ happened it rained 8 of those 10 times, well it’s probably gonna rain again then.
And removed that the “XYZ” condition involves taking multiple kinds of data from multiple sources.
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