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My Android phone is enabled for home WiFi as well as cell tower connection. My location services have been enabled as well to use Google Maps for tracking Location history. Whenever I go to my balcony of my apartment I find lot of secured WiFi connections available in addition to my connected home WIFI. Others are secured and not connected.

The are lots of blue dots for various locations in location history closer to my home where I have not even visited but shows up in the location history.

Is it possible that wrong locations appear in my location history?

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Yes its possible because the location tracking is not always accurate. It's based on your GPS reception, Wifi Hotspots etc. Please take a look at the answers for more information. Make sure you set your location settings to High Accuracy for better location reporting results.

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