What is the setting's impact on the people in Holes?
The setting’s impact on the characters comes from the unique influence of Camp Green Lake, before and after. In the past, it was a lake and a town. In the present, it is a camp for juvenile delinquents. In each case, being in that setting is what causes the characters to act as they do.
For example, Stanley notes that the boys change their names to nicknames and pay no attention to skin color while they are at Camp Green Lake.
Stanley was thankful that there were no racial problems. … On the lake they were all the same reddish brown color—the color of dirt. (ch 19, p. 84)
In the past, on the other hand, race was important. This is what caused the people of Green Lake to kill Sam. They did not approve of his race, and his attentions to a white woman. It demonstrates how a difference of many decades and a change in the geographical makeup of the setting, once the lake was gone, makes such an impact on the characters.