The traditional explanation is that the character is a picture of two people sitting back to back on the North Pole.
Common word: 北京 Běijīng
Common word: 背景 bèijǐng 'background'
Note that the element in the enclosure at the bottom is not 羊 yáng 'sheep' as it lacks a horizontal stroke.
Common word: 南京 Nánjīng
东京 Dōngjīng 'Tokyo' (lit. 'Eastern Capital'). Note how Japanese often has k where Mandarin has j and ng in Mandarin becomes a long vowel in Japanese.
In case you wondered, 西京 Xījīng (lit. 'Western Capital') used to be used for modern 西安 Xiān in the Han Dynasty.