master.xml

<data>
  <countries name="United Kingdom">
		<country name="England">
			<county>Bedfordshire</county>
			<county>Berkshire</county>
			<county>Bristol</county>
			<county>Buckinghamshire</county>
			<county>Cambridgeshire</county>
			<county>Cheshire</county>
			<county>City of London</county>
			<county>Cornwall</county>
			<county>Cumbria</county>
			<county>Derbyshire</county>
			<county>Devon</county>
			<county>Dorset</county>
			<county>Durham</county>
			<county>East Riding of Yorkshire</county>
			<county>East Sussex</county>
			<county>Essex</county>
			<county>Gloucestershire</county>
			<county>Greater London</county>
			<county>Greater Manchester</county>
			<county>Hampshire</county>
			<county>Herefordshire</county>
			<county>Hertfordshire</county>
			<county>Isle of Wight</county>
			<county>Kent</county>
			<county>Lancashire</county>
			<county>Leicestershire</county>
			<county>Lincolnshire</county>
			<county>Merseyside</county>
			<county>Norfolk</county>
			<county>North Yorkshire</county>
			<county>Northamptonshire</county>
			<county>Northumberland</county>
			<county>Nottinghamshire</county>
			<county>Oxfordshire</county>
			<county>Rutland</county>
			<county>Shropshire</county>
			<county>Somerset</county>
			<county>South Yorkshire</county>
			<county>Staffordshire</county>
			<county>Suffolk</county>
			<county>Surrey</county>
			<county>Tyne and Wear</county>
			<county>Warwickshire</county>
			<county>West Midlands</county>
			<county>West Sussex</county>
			<county>West Yorkshire</county>
			<county>Wiltshire</county>
			<county>Worcestershire</county>
		</country>
		
		<country name="Scotland">
			<county>Aberdeenshire</county>
			<county>Angus</county>
			<county>Argyllshire</county>
			<county>Ayrshire</county>
			<county>Banffshire</county>
			<county>Berwickshire</county>
			<county>Buteshire</county>
			<county>Cromartyshire</county>
			<county>Caithness</county>
			<county>Clackmannanshire</county>
			<county>Dumfriesshire</county>
			<county>Dunbartonshire</county>
			<county>East Lothian</county>
			<county>Fife</county>
			<county>Inverness-shire</county>
			<county>Kincardineshire</county>
			<county>Kinross</county>
			<county>Kirkcudbrightshire</county>
			<county>Lanarkshire</county>
			<county>Midlothian</county>
			<county>Morayshire</county>
			<county>Nairnshire</county>
			<county>Orkney</county>
			<county>Peeblesshire</county>
			<county>Perthshire</county>
			<county>Renfrewshire</county>
			<county>Ross-shire</county>
			<county>Roxburghshire</county>
			<county>Selkirkshire</county>
			<county>Shetland</county>
			<county>Stirlingshire</county>
			<county>Sutherland</county>
			<county>West Lothian</county>
			<county>Wigtownshire</county>
		</country>
		
		<country name="Wales">
			<county>Anglesey</county>
			<county>Brecknockshire</county>
			<county>Caernarfonshire</county>
			<county>Carmarthenshire</county>
			<county>Cardiganshire</county>
			<county>Denbighshire</county>
			<county>Flintshire</county>
			<county>Glamorgan</county>
			<county>Merioneth</county>
			<county>Monmouthshire</county>
			<county>Montgomeryshire</county>
			<county>Pembrokeshire</county>
			<county>Radnorshire</county>
		</country>
		
		<country name="Northern Ireland">
			<county>Antrim</county>
			<county>Armagh</county>
			<county>Down</county>
			<county>Fermanagh</county>
			<county>Londonderry</county>
			<county>Tyrone</county>
		</country>
		
	</countries>
</data>

master.xsl

<xsl:stylesheet xmlns:xsl="http://www.w3.org/1999/XSL/Transform" xmlns:exsl="http://exslt.org/common"
    xmlns:date="http://exslt.org/dates-and-times"
    exclude-result-prefixes="exsl date" version="1.0">
      
  <xsl:output method="xml" indent="yes" />

  <xsl:template match="/">
      <label for="location"></label>
      <select name="fields[location]" class="form-control" id="location">
              <option>Select - Location</option>
        <xsl:for-each select="//data/countries//county">
                      <option value="."><xsl:value-of select="."/></option>
              </xsl:for-each>
      </select>
  </xsl:template>

</xsl:stylesheet>