Do you mean that you think an existing city can be identified as the city of Troy (Ilion) from the Iliad? As opposed to a buried ruin being identified as that city?

It is pretty much established that Troy was the mound of Hisarlik, specifically level VII (1300-950 BC). Many Hittite texts reference a conflict between the Ahhiyawa (identified as the Achaeans of the Iliad) and the city of Wilusa (identified as Ilion, or Troy). The moud of Hisarlik is identified as the city of Wilusa. It's in the right geographical location, and several geological studies have expressed the position that Hisarlik is in agreement with Homer's description. The linguistic evidence is there, as Wilusa is connected to Ilion (another name for Troy) linguistically between Luwian (the Anatolian language at the time) and Greek, as well as several other names, such as the Ahhiyawa (achaeans), the river Scamander (Karamanderes), and Priam and Paris (birth name Alexandros) the rulers of Troy are seen in Luwian and Hittite texts as Priimuua and Alaksandu. The level of troy most often cited as the level of the War is level VII, which was destroyed by human conflict, according to the excavators.

The wikipedia article on Ancient Troy is pretty well-researched for an overview on the subject.

If you are interested in more in-depth reading, I recommend

Sagona, A G, and Paul E. Zimansky. Ancient Turkey. London: Routledge, 2009

Easton, D.F.; Hawkins, J.D.; Sherratt, A.G.; Sherratt, E.S. (2002). "Troy in Recent Perspective". Anatolian Studies (52): 75–109

Allen, Susan (July 1995). "'Finding the Walls of Troy': Frank Calvert, Excavator". American Journal of Archaeology 99 (3): 379–407

Wood, Michael (1985). In Search of the Trojan War. BBC Books; First Thus edition

Of course, this is merely the scholarly consensus. There is a small possibility that this identification is erroneous, and that Troy is located elsewhere, and if so, could certainly be underneath a populated city. Personally, I find this option unlikely, and think the identification with Hisarlik to be the best option.

Many ancient cities are indeed located underneath modern ones. Jerusalem, for example, as well as Gaza and Ashdod.

However, many ancient cities are left alone and uninhabited because the very qualities which made them desirable in the past (up high, easily defendable in case of conflict) are rendered obsolete by peace introduced by the Romans, and so people tended to come down off their mounds and settle in the plains surrounding the city, as can be seen at Beth Shean in Israel. When the region was generally at peace under the rule of an outside empire like the Romans, there was no need for defensibility, and it was better to be down near the water sources and nearer to the fields, and there was much more room for expansion in the plains and valleys, so generally (there were exceptions, such as Jerusalem) people abandoned the mounds for other settlements.

Edit: spelling

hi! I'm not sure if "being somewhere in a mysterious location near Mediterranean sea" implies that the site of Troy is unknown, but it is known, and it's a ruin. Check out these posts; btw, there's also lots more info on Troy (and the Trojan War) in the FAQ

• Is there still a large amount of debate as to if Troy was a real place?

• How aware were the Byzantines of the physical location and history of Troy?

• I've seen this come up a bit in unreliable TIL links, but did the city of Troy really exist/what do we actually know about the Trojan War?

• When did the Romans lose Troy?

• What happened to ancient cities such as Sparta, Carthage and Troy?

• How did ancient archaeological sites like the Palace of Knossos and Troy (but not limited to) get buried?