In this paper, we study periodically modulated $s=1/2$ spin chain in a linear gradient potential (LP) that is generated by an external magnetic field. In the absence of the LP, the system has topological states that exhibit a magnetization plateau for a uniform external magnetic field... These topological states have a finite integer Chern number and their stability is clarified by an equivalent spinless fermion system derived by a Jordan-Wigner transformation. We show that the LP, which is nothing but a constant electric field in the spinless fermion system, destabilizes the topological states, because it induces localization called Wannier-Stark (WS) localization. We clarify the phase diagram in the presence of the LP and on-site diagonal disorder. To this end, we carefully study edge excitations under the open boundary condition, which are a hallmark of the topological order. We find a very interesting phenomenon indicating existence of a quasi-edge modes that take the place of the genuine edge modes in certain parameter regions. This is a precursor of the WS localization realized in topological states. Finally, we investigate many-body localization induced by a sufficiently strong LP or disorder. To this end, we study the energy-level statistics for whole energy levels, and find unexpected extended-state regimes located in intermediate potential-gradient and weak on-site disorder regimes. We verify this phenomenon by calculating variance of the entanglement entropy. The present system is closely related to quantum Hall state in two dimensions, and therefore our findings can be observed not only in experiments on ultra-cold atomic gases but also quantum Hall physics. (read more)