This info is a year old, so things could’ve changed significantly since:
The idea of doing it in Montana was the predominant idea — like many of you, we were kind of led to believe at first that it would be a Wild West motif, just to see what we thought of that idea — but that changed when they started to show us character profiles and other collateral. The general thrust of this game is that it will take place in present day, and feature the protagonist taking on a Jim Jones or David Koresh-like religious cult in a small town in Montana that’s been populated by, essentially, Doomsday-preppers bent on furthering their cause. So, modern-day weaponry and modern-day vehicles, plus a hilly, mountainous backdrop. Honestly, it sounded at the time like they were using that to their advantage, given that when you think of Far Cry you kind of think of mountains and hills and the kind of backdrop Montana has in spades.