multi city wordpress capability

Hello
We are in interested in creating a online art magazine for the entire state of california. The site for example could be http://www.yxz.com, this domain would act as the main hub for all the content on the site. However users could then select a city and then for example be taken to la.xyz.com which would be in its own way be a stand alone site within http://www.yxz.com. Is something like this possibly? Can we have just one copy of wordpress on the site where we could then manage each different city? It would be big pain in the &%Q@ to have to create and upload complete wordpress packages for each city/subdomain we would like to highlight.

I appreciate any feedback or any recommendation!