Why can't I build a city here?

The Settler Lens tells you where you can settle.

• Red means you cannot settle here. You are either too close to another city, or the terrain is not suitable for founding a city (e.g. sea/ocean, mountain/volcano, Natural Wonder, etc.)
• Gray means your city won't get any Housing bonus. It will have a harder time growing.
• Light green means your city will get +1 Housing bonus.
• Dark green means your city will get +3 Housing bonus. It will grow more easily.

You can't found cities within 3 hexes of another city. This means that between your city and the next, there must be a distance of at least 3 hexes.

If you look at your screenshot, you'll notice that the majority of red tiles are within 3 hexes of another city.

_{Click on image to see a larger version}

The rest are probably also in range of another city, but we can't see them. In the upper part of the screenshot, there's likely a city above the "City?" marker, outside of the screenshot. In the bottom part, the city is most likely hidden somewhere behind the fog of war.

You also can't found cities within the borders of another nation, but all the borders in this screenshot are smaller than the 3 hex radius.