Ambrose Bierce's short story "An Occurrence at Owl Creek Bridge" was first published in his collection of stories Tales of Soldier's and Civilians (1891) and focuses on the hanging by Union troops of Peyton Farquhar, a wealthy southern civilian planter, who has, as we learn in the story, engaged in some sort of sabotage at the Owl Creek Bridge near his plantation. During most of the Civil War, civilians who engaged in spying or sabotage, because they were not in uniform, were often summarily executed by military authorities--no trial, just a sentence of death and immediate execution usually by hanging.
Setting, according to Aristotle, comprises three elements: 1) historical--that is, the time period in which the story occurs; 2) geographical--that is, the general location of the story (for example, the country, state, county, town); and 3) physical setting--that is, the precise area of the story's action (for example, a room in a house, a library, a courtroom, an office). Aristotle, in his Poetics, argued that all three elements of setting provide some necessary background information for the reader to understand fully the narrative.
In "Occurrence," then, the historical setting is the Civil War, sometime between 1861-1865, most likely 1862 or 1863 when Union troops were operating in that area. We know from Bierce's comment that the general location is northern Alabama, and the physical setting is, of course, Owl Creek Bridge where Farquhar apparently committed his "crime" and where his is going to hang.
An interesting coincidence is that there is an actual Owl Creek in the Bankhead National Forest in northern Alabama. Also, Bierce was an officer during most of the Civil War, and his main job was as a topographical engineer, a map-maker, and it would be natural for him to pick a bridge as the site of one of his stories.
In An Occurrence at Owl Creek Bridge, the setting becomes apparent immediately. A hanging is imminent and will be performed in keeping with strict, military guidelines, despite the informality of the bridge on a railroad. The significance of these very strategic points (both bridge and railroad) in terms of winning and losing battles must not be overlooked. Reference to Alabama and the Federal army do suggest that the American Civil war is the time period.
At this moment, time almost stands still. Even the ticking of a watch can be heard. The language is plain and the reader has no doubt that the "man" is in trouble as "a rope encircled his neck." The ceremony that accompanies this scene is formal and correct, in keeping with military expectations as "not a man moved." The precision with which the hanging will be performed is noteworthy.
Farquahar, a civilian, identified only as a "planter,"aged about thirty-five, will be hanged for an, as yet, undisclosed, reason. He is not a violent-looking man but even "gentlemen" have been known to have been hanged under "the liberal military code."