The term 'City of Canals' refers to two cities, Osaka and Venice. Osaka is a major port city in Japan, located on the island of Honshu. It is known for its many canals, which are used for transportation and commerce. Venice, located in Italy, is also known as the 'City of Canals'. It is famous for its intricate network of canals, which have been used for centuries for transportation and trade. Both cities are renowned for their unique architecture and culture, and are popular tourist destinations.