The City vs. Highway stat is calculated the same way as all of your other Fuelly stats. You can set a City percentage of driving each time you fuel-up, and the total city/highway split across all of your fuel-ups is reflected in the graph.
The default value is 50/50, so you probably just haven't noticed this new setting on the fuel-up form before.
If you don't like the city/highway stat you can disable it in your vehicle preferences.
I live in a Suburban area but have to drive through town 25 miles to get to work. The road is all interstates and highways for the most part (90%) but the stop and go nature of Morning Rush Hour makes me think this is more "City Driving"
Conversely, when I spend time driving around my neighborhood on the surface streets it is usually at 45 mph and with few interruptions or stops because we are out away from the congestion of town. So the long uninterrupted distances make my driving habits more like the interstate.
It's really up to you. The highway/city is completely subjective and not scientific in any way, so there's no right answer. I'd just use whatever system makes the most sense to you personally to help trigger your memory about driving patterns.
"The city test is approximately 11 miles long and simulates a stop and go trip with an average speed of about 20 miles per hour (mph). The trip lasts 31 minutes and has 23 stops. About 18 percent of the time is spent idling (as in waiting for traffic lights). A short freeway driving segment is included in the test. The engine is initially started after being parked overnight.
The highway simulates a 10 mile trip with an average speed of 48 mph. The vehicle is started "hot" and there is very little idling and no stops."
So you could use that as a guide. Or not, that's ok. The data is available for everyone to look at, but the most important thing is that it's useful to you.