What is the difference between near and by?

[Joss]

Test No. incompl/elem-1 "Speaking already", question 4

We live ......... the city centre.

(a) near
(b) next
(c) by
(d) nearby

Test No. incompl/elem-1 "Speaking already", answer 4

We live near the city centre.

Correct answer: (a) near

Your answer was: incorrect
We live by the city centre.
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Hi there,

I understand that 'near' perfectly fits here, but why not 'by'?
Thanks

[Alan]

There are many uses of this preposition but it doesn't fit here because it is not precise enough. You could say by the river/by the sea but city centre is more exact.
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