Another example I can think of is..
Police chasing a theif. Theif runs away a man sees him. This is the conversation
Pol: Chor kidhar gaya – Where did the theif go?
Man: Iss taraf – this side.
One more example
Now sometimes there are diversions on High way. Suppose I am Mexico heading towards Mexico City and I reach a diversionand I am confused so I ask a lady passing by. Here’s the conversation that I will use.
Me: Madam, kya aap bata sakti hain Mexico City KIDHAR hai? – Madam can u tell where is Mexico City?
(Wells he might give me an amazed look and say “Que hablas! Estas locho?” ha! Ha! But in a hypothetical world let’s imagine Mexicans know Hindi or at least the lady we met knows :D )
Lady: Ji haan, is taraf – yes, this way
Me: Bahut bahut shukriya
BUT
Sitting in India if I wanna ask Where is Mexico city?
I will say
Mexico city Kahan hai? – Where is Mexico city
And the reply I expect is
Mexico Mein, Yeh shahar Mexico ki raajdhaani hai – In mexico, this city is the capital of Mexico.
And not this side or that side :D
So the gist I get is..
Both are interchangeable no hard and fast rule
But Preferably (atleast I would) Use Kahan when the place being talked about is FAR and you expect the reply to be a LOCATION
And Use KIDHAR when when the place being talked about is relatively NEAR and you expect the reply to be pointing towards a DIRECTION.
Well having answered your question I feel a lot clearer myself so thanks for asking :)
Still any doubts you can always Ask :)