The time and place in "The Lottery" are deliberately vague because of the points Jackson wished to make. Anywhere, any time, people can be persuaded to be followers, to blindly adhere to tradition, and to create scapegoats. Notice that in the story, not only is the setting vague, but also the reason for the lottery is unclear. People in the village do not know why they are doing what they are doing, and so they simply submit each year to what is essentially a ritual killing. If the story were tied to a particular time and place, it would lose much of its power because we would be less likely to look within ourselves and ask ourselves to what degree we are or could be guilty of the same behavior. There are many instances world over in which people behave as the villagers behave. The Holocaust is one example, and Darfur is another more recent one. Man's inhumanity to man is not bound to time and place, and so, the story, with its vague setting, has greater impact.
I would also like to point out that while the setting is vague, there are elements to the setting that show the village and its people as "normal." Jackson is showing us ordinary people, who work, have families, do laundry, and go to meetings. So while the village could be any village, the idea that these are people just like us also contributes to the story's value, since regular, everyday people just like us are capable of such terrible deeds.