In my opinion, there is no better definite example of local color than the Eatonville, Florida of Their Eyes Were Watching God. Just a little bit from eNotes about local color (because I couldn't define it as eloquently as this):
Regional and local color stories concentrate on the landscape, dialect, customs, and folklore specific to a geographic region or locale; in fact, the setting can be so integral to the story that it sometimes becomes a character in itself. Characters in these stories adhere to traditional gender, ethnic, and socioeconomic roles.
Ah, Janie in Eatonville, ... everything from checkers on the front porch to the devastation of the hurricane. Local color at its best.
My one issue with local color here is that, generally, local color stories aren't "supposed" to have much of a plot. Hmmmm, that's certainly not true here. One absolutely never forgets when Tea Cake gets bitten by that rabid dog and subsequently gets rabies: an unforgettable image.
Therefore, I can understand how someone can make a case either way. An interesting topic! I hope others join in!
Meanwhile, check out one of our links for more: http://www.enotes.com/short-story-criticism/regionalism-and-local-color-short-fiction