create table #Something
(
	ChildID int,
	ChildName varchar(20),
	ParentID int,
	PID int
)

insert #Something
select 100, 'Bingo', 200, 1 union all
select 101, 'Pingo', 201, 1 union all
select 102, 'Zingo', 201, 1 union all
select 100, 'Bingo', 201, 2 union all
select 101, 'Pingo', 200, 2 union all
select 102, 'Zingo', 201, 2 union all
select 100, 'Bingo', 201, 3 union all
select 101, 'Pingo', 201, 3 union all
select 102, 'Zingo', 200, 3 union all
select 100, 'Bingo', 200, 4 union all
select 101, 'Pingo', 201, 4 union all
select 102, 'Zingo', 200, 4

select * from #Something

drop table #Something

create table #abc
    (insertid int, cityid int, parentcityid int, cityname varchar(50), parentname varchar(50)
    ,PRIMARY KEY CLUSTERED (insertid, cityid, parentcityid))
insert into #abc
select 1,10,11,'A','B'
union all select 1,11,12,'B','C'
union all select 1,12,13,'C','D'
union all select 2,10,11,'A','B'
union all select 2,11,13,'B','D'
union all select 2,12,11,'C','A'

DECLARE @NextParentID INT = 0, @CityID INT = 0
UPDATE a
SET @NextParentID = CASE WHEN parentcityid >= @NextParentID THEN parentcityid + 1
        WHEN CityID >= @NextParentID THEN CityID + 1 
        ELSE @NextParentID END
    ,@CityID = CityID = CASE WHEN (
        SELECT CityID 
        FROM #abc b 
        WHERE b.InsertID = a.InsertID - 1 AND b.cityid = a.cityid AND
            b.parentcityid <> a.parentcityid) IS NULL
        THEN CityID ELSE CASE WHEN @CityID >= @NextParentID THEN @CityID + 1 ELSE @NextParentID END END
FROM #abc a
OPTION (MAXDOP 1)

SELECT * FROM #abc

DROP TABLE #abc