I am parsing country extracts of OSM data. What I want to is the get the name of the City and Country that that point or way belongs to. Is this possible? How can I go about getting this information?
To retrieve this information you need a geocoder, unless the node has the relevant address tags. Nominatim is a good geocoder for OSM and there are some more.
If you have the ID of the node or way, then just use Nominatim's reverse geocoding capabilities. This is the result for way 206488036: http://nominatim.openstreetmap.org/reverse?format=xml&osm_type=W&osm_id=206488036
Change the osm_type parameter if you want to query for nodes (N) or relations (R) instead of ways.