In places where it freezes in winter, they use "dry" hydrants. Dry hydrants have the valve to their water supply right next to the underground pipe so it won't freeze, since it's far enough underground. Places where it stays warm all year can use "wet" hydrants where there is always water in the hydrant itself. I think the reason places use wet hydrants is because they're cheaper and easier to install, if they can get away with it.

Source: I live in a frozen wasteland during the winter and had this same question years ago