The setting in literature serves several purposes: it creates a mood, it can act as an antagonist, it can provide historical background, or it can be a symbol in itself.
In the case of Sherman Alexie's The Absolutely True Diary of a Part-Time Indian, there are two locations making up the setting: that of the Spokane Indian Reservation (symbolic of oppression) and Rearden School (symbolic of freedom). And of course, the fact that there are two locations suggests that these places will be in conflict with one another. This proves to be true as Junior realizes that remaining on the reservation will not provide the same experience as that of the school twenty miles away. With this decision comes a price: Junior no longer feels accepted on the "rez" and he struggles to find his place in a sea of whiteness. These two locales antagonize Junior which provides the center of the plot.
Place is not limited to physical environment. The nonphysical environment should also be considered as an element of setting:
The nonphysical environmentincludes cultural influences such as education, social standing, economic class, and religious belief. These may be revealed by physical properties in the scene or through the characters' dialogue, thoughts, statements, and behaviors.
Keeping the nonphysical environment in mind is crucial to fully understanding how setting influences the plot. Alexie presents the reader with a character, struggling for acceptance not only because of his physical environments, but through his cultural influences displayed through his actions, his struggles, and art.