The setting is a suburban community, with many families being close friends and the children, including the protagonist Greg, being very aware of their relative social status. People in this community generally don't have life-changing problems; every event is filtered through Greg's immature eyes, and he cannot fully understand things that would be more dramatic to an adult. Instead, since his life is relatively simple and safe, the story becomes about his small problems of social status and friendship. The setting contributes to this because Greg starts the book outside his comfort zone; he enters middle school and is unprepared for the new unwritten rules of school heirarchy and interaction.
Like I said, Bryce is the most popular kid in our grade, so that leaves all the rest of us guys scrambling for the other spots.
The best I can figure is that I'm somewhere around 52nd or 43rd most popular this year. But the good news is that I'm about to move up one spot...
(Kinney, Diary of a Wimpy Kid, Google Books)
Greg has to balance his supposed school reputation with his home life; he is comfortable with his home life but he is also annoyed with much of his daily routine. However, because it is a comfort zone, he never has to worry about real consequences. In his school life, he is hyper-aware of his social status, and creates his own problems by misbehaving or acting "incorrectly." In this way the "new" setting of middle school creates most of his internal drama.