Think about the metaphors of blindness and silence Joyce uses to describe where these characters live; the street is "blind," the rooms airless, someone has just died. The only life and color that is introduced into this boy's world comes through his awareness of a girl's braid of hair. Where she is, is light and sound; everywhere else is cast in shadow. There is promising activity, but it slows up again while he has to wait, bored and impatient, for his uncle to return home. He gets his money, gets on a train; the train moves too slowly, and when he gets to the mystical Araby fair, the place is closing down, being plunged into darkness and silence, as is the boy. The story begins with the metaphor of darkness and silence, and ends on the same note, with a twist. Now the protagonist is not just aware of how colorless his world is, he is also disgusted with himself for his vanity; it is a sin. The background Joyce alludes to, but only briefly paints, is the world of Irish Catholicism, where a young man in the throes of his first real crush, is nonetheless surrounded by a claustrophobic, self-absorbed world where the "decent" inhabitants all know each other's business, and watch, silently, while life passes them by. The narrator knows he will be one of them now, since he has let himself down. He dreamed a grand dream, and could not deliver on its promise.
The setting is very dark, dreary, and depressing. It is set in Dublin, Ireland, when it was still under British control. Many were living in poverty and had no job. Gathering places were small pubs, which led to much drinking, and a lot of alcohol abuse. The narrator's uncle, for example, comes home late, which makes the narrator angry, and he comes home drunk. The narrator and his aunt and uncle live in a dreary home on a dreary street that is dark and depressing. The story details the narrator's obsession with one of his friend's sisters. A normally good student, the narrator neglects everything in his life to watch this girl and he becomes intent on buying her a gift at the market after he promises her one. Because the setting is dark and not cheerful or happy, the reader can assume that the outcome might not be this way. This happens with the narrator has an epiphany after getting to the market. He realizes that he has wasted his time by obsessing over the girl and that his life is not as it seems.