How can I remove a city from the word clock widget shown below?
You can choose whatever cities you like as long as there are four of them :-)
Just click on city name you want to replace, choose new one using Search field or use drop-down list in pop-up window. Your new choice will be displayed instead of Apple default.
It looks like we are not able to add or delete a clock at this time. Check this post from Apple Discussions.
The closest solution is to add a single city clock widget...