is located inside an Indian reservation?

Could it be the city of Sherrill NY? Source

No. It is Salamanca, N.Y.
Allegany Indian Reservation (AIR) - The AIR is located along the Allegheny River from the Pennsylvania border upriver to Vandalia, New York, and is located entirely within Cattaraugus County. The AIR originally included 30,469 acres of land surrounding the Allegheny, of which some 10,000 acres were inundated by the Kinzua Reservoir when the Army Corps of Engineers built the Kinzua Dam in 1964. This reservation also includes the city of Salamanca.

Good one Frankvan. I hope the people in Salamanca don't have half the problems the "Montrealers" had with the same tribe (Mohawks or Iroquois) in the 1990's and the French 500 years ago (and on).

Look here

In 1905 a Dutch woman, a widow, living in Amsterdam, met an Indian Chief, American Horse, leader of a touring Indian Village of 45 Mohawks, travelling and putting on exhibitions in severasl European countries. They married in London, England and returned to Kahnawake, Canada. The Dutch woman was my grandmother and her then 15 year old son was raised on the Kahnawake reservation. My father spoke, Dutch, English, French, and Mohawk. As a child We spent all of our summer vacations on the reservation and my older brother, married to a Mohawk, lives there to this day, and I have nieces who are half Amerindian. What most Americans don't seem to realize is that the Eastern and Northern parts of the continent were settled first and the Indians in New York and Canada were quite civilized by the time we were warring with the Western tribes.In fact the Iroquois confederacy taught Ben Franklin and the founding fathers how to set up a government in which several states or tribes could govern and live peacefully together.

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Frank, that was very interesting about your grandmother. Thanks.