I don't believe this is what Maxmind does; I have no direct knowledge but I believe their data is based on IP registry data (location of the registering org) along with inference from per-user registration data (surveys, social networks, panels, etc.)

Akamai has a (much more expensive) geolocation product that's based on doing triangulation, since they have a lot more information on routing (all those edge servers) but I'm not sure it's appreciably more accurate.