A City Upon A Hill is a phrase from the parable of Salt and Light in Jesus' Sermon on the Mount. In Matthew 5:14, he tells his listeners, "You are the light of the world. A city that is set on a hill cannot be hidden."
Puritan John Winthrop's 1630 sermon "A Model of Christian Charity" applied this parable to the New World. Still aboard the ship Arbella, Winthrop admonished the future Massachusetts Bay colonists that their new community would be a "city upon a hill", watched by the world. Winthrop's sermon gave rise to the widespread belief in American folklore that the United States of America is God's country because metaphorically it is a Shining City upon a Hill, an early example of American exceptionalism.
Ronald Reagan used this image in his farewell speech in 1989:
...I've spoken of the shining city all my political life, but I don't know if I ever quite communicated what I saw when I said it. But in my mind it was a tall proud city built on rocks stronger than oceans, wind-swept, God-blessed, and teeming with people of all kinds living in harmony and peace, a city with free ports that hummed with commerce and creativity, and if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it and see it still...
I am Thankful that I was born in this God-blessed nation always striving to be the City on the Hill.
(portions from Wikipedia).