The geographical setting of Freak the Mighty is Portsmouth, New Hampshire. The most important settings are what Rodman Philbrick describes as social settings and imaginary settings. The social setting are of two types. The most imporatant type is domestic social settings, where people live. These settings are symbolic of the metaphoically crippled people and families who dwell there. They are violent, ugly, dirty and unwholesome. The second type is the social instutional settings, like hospitals and schools. These settings have more order and cleanliness and wholesome life but they are almost equally violent; violence may erupt at any moment toward the diseased and disabled as they are taunted, teased and mercilessly ridiculed. The third setting is the imaginary setting. The boys can turn moments of pain and despair and fear into adventure in wonderlands. It is through these imaginary settings that the boys find a means to make their lives livable.
Rodman Philbrick's Freak the Mighty is set in Portsmouth, New Hampshire, and it follows a year in the lives of Maxwell "Max" Kane and Kevin the "Freak."
Portsmouth frequently serves as a dangerous space for Max and Freak, with both boys facing their own private "settings." Kevin, who suffers from a birth defect that has left him unable to walk without the use of crutches and leg braces, is often confined to clinical settings; he spends a great deal of time in the hospital, where he dreams up the concept of a "bionic body" in order to cope with the burden of his illness. Max's most challenging environment is perhaps the classroom, as he finds himself struggling through his schoolwork and unable to keep up with his peers.
Together, as "Freak the Mighty," Max and Freak exist within the space of the imaginary. Their collective powers (Freak's mind and Max's strength and stature) allow them to go on wild adventures without ever leaving the confines of their modest town.
I had to smile a bit when I read your question because it's not really fair to ask the "where" of this story. Why? Well, the actual answer to your question is known as Portsmouth, New Hampshire. The author, Philbrick, himself has told us this, so we can be sure of it. Portsmouth, New Hampshire is where Philbrick went to high school, so it was a perfect place to set the story.
HOWEVER, the question isn't fair because lots of the story is set among Freak the Mighty's IMAGINARY adventures! Kevin, for example, is always imagining his body without the effects of pain and prefers himself in this imaginary world. At one point, the two search for dragons in an imaginary land. In another scenario, Kevin instructs max to get to the medical research area of the hospital. Why? Because that is where the cool robot bodies for Kevin are being hidden! So, as you can see, the "medical research area" doesn't really exist. The hospital where Kevin spends a lot of his time, however, DOES exist.
So, I guess we can say, if we are going to get more specific than Portsmouth, New Hampshire, that the setting of the story can take place in the school of Portsmouth and the hospital of Portsmouth and the homes of Portsmouth and the countryside of Portsmouth. However, none of these elements of setting are more important than Kevin's imagination! There is a perfect quote that exemplifies the importance of this imagination. I will end with this:
Remembering is just an invention of the mind... It means that if you want to, you can remember anything, whether it happened or not... You don't need a time machine if you can remember.