Setting refers to the time and place of a story--always both--one cannot be somewhere without being there at a certain time, for a length of time. But both time and place can range from very general to very specific. For example: The American West, late 1800’s as opposed to seven-fifteen PM, Tuesday October sixteenth, 1842 on a couch in the front room of Madame Lulu 15 Rue de Citron, Nice, France.
Unlike drama written for the stage, where changing the setting of a story involves actually moving furniture and walls, perhaps even trees, stories intended for readers have no limits in changing setting--not how many different settings, nor how frequently they change--beyond the verbiage needed to conjure up the new time and place in the reader’s imagination or accomplish some other goal the writer might have. But changes in setting are rarely whimsical or random, instead tending to facilitate, augment, heighten, enhance or in some other way contribute to some other aspect of the story, such as mood, atmosphere, plot, character or theme.
One thing readers sometimes tend to forget is that the time and place of a story are as fictional as the rest of it--even when specific places or specific historical events are involved--because the events of the story never occurred at that time and in that place; they were made up. So do bear in mind that the setting is what it is to accomplish the writer’s purposes.
The importance of setting varies considerably from story to story. Sometimes a story would be the same story no matter where it was set; on other occasions, the exact same story placed in the context of two different settings would result in two different stories. Writers have a wide variety of views on the role setting plays in the events that transpire there. In stories where the main conflict involves a character trying to overcome an obstacle in his/her environment, setting can take on the significance of another character. Writers sometimes encourage or foster this impression by personifying environmental elements like the wind, a river, a mountain or maybe a winter storm, seeming to invest the element with human qualities, like will and intent, anger, or maybe playfulness.
With the advent of modern psychology, writers have come to appreciate the relationship between stimulus and response, and to understand that environment can be an important conditioner of human behavior. If someone is born in a wilderness swamp or in an urban ghetto slum, raised there through his/her adolescence and then transplanted elsewhere, would that early environment shape that person’s character, affect that person’s personality, values, attitudes, philosophy? A thoughtful, but safe, response to that question would be, “well, I suppose it could.”
Just as our moods might be shaped by our surroundings or the weather, so might environment contribute to the atmosphere of a story and thereby not only influence the moods of the characters, but the reader’s as well. Consider the role of setting in practically any story by Edgar Allen Poe. Even if the exact time and place of the story remain unclear, the details of description he provides have an enormous impact on us psychologically and emotionally.
Description is the writer’s chief tool for enabling us to imagine the setting. He chooses his words carefully to exactly depict the sights, sounds, tastes, tactile sensations and smells that he wants us to experience. But he also structures his sentences and times the placement of these words for greatest effect--whether that effect be the joy of romping uninhibited through a meadow of wild mountain flowers on a summer afternoon, or the fear engendered by entering the inner sanctum of a psychotic serial killer.
Writers use other methods to reveal setting, too: the dialogue of characters can provide us with information about where they are and what it means to them to be there at that time; character actions are often deemed appropriate or inappropriate by us depending on when and where they occur--in fact, what a character is doing often gives us very particular information about when and where he is. The one tool writers seldom use to convey a sense of time and place is narration. Telling us when and where things are happening is simply not as effective as showing us, although there are times, particularly when setting is not terribly important, that simply telling us when and where is enough.
Since writers often take us to places and times that we could never visit personally, how can they be sure we’ll get the right idea from their description? They can’t. But they can come close. Regardless of when or where a story happens, virtually all of us have had analogous experiences that the writer can tap through the power of suggestion. Who over the age of five has not felt the power and latent danger of a large powerful machine when in close proximity to it while it is running? We’ve felt the rumble, the vibration, the power surging through it. Does it matter that what we experienced may have been a furnace, an automobile, a tractor, or a washing machine and not a high frequency, port-motored, sodium powered brain pump?
A useful link to more information on setting (and other aspects of literature):