The country, formerly North America, is called Panem. Originally it had 13 districts living in peace and prosperity, but there was a time of uprising against the Capitol (the Dark Days), and twelve districts were defeated, while the 13th was obliterated. It is now officially divided into twelve districts, each having a specific responsibility to the government. However, a rumor of a 13th district that has developed full of independents abounds. The governing district is called The Capitol, and the immediate surrounding districts to the Capitol are responsible for the safety and nourishment of the Capitol. The further you live from the Capitol, the less food and protection you receive. Each district has a mayor. District 12 is very poor and people are starving. Every year, as a punishment to the people for the uprisings of the Dark Days, they have a Reaping. Each of the twelve districts must provide one girl and one boy to take part in the Hunger Games. All participants will be imprisoned in an outdoor arena and must fight to the death. The winner's district will be rewarded with prizes and food for a year. It is the Capitol's way of letting the people know that the Capitol is in control.
Katniss lives in a section of District 12 called the Seam. It is responsible for coal production. It is edged by the Meadow. All of District 12 is surrounded by an electrical fence topped with barbed-wire loops. Its purpose, supposedly, is to keep predators out, but it also keeps the people inside. Trespassing in the woods is illegal and poaching carries a severe penalty. No weapons are allowed in the district. Anyone caught selling weapons will be sentenced to death. Almost no one can afford doctors, so people with healing herbs are the best they can do. Food is scarce.
There is a black market in the town called The Hob. It operates in an abandoned warehouse, and it is where Katniss and Gale exchange their prizes from the meadow for things they need in their houses. People will add their names to the reaping jar (the jar that they use to pull out names of those in the Hunger Games) for a meager year's supply of grain and oil for one person. The rich of the District never have to do this, so it has become a way for the Capitol to plant hatred and distrust between the starving workers of the Seam and those with political power. So, there is anomosity in this Distict.
There is a square in the middle of town which is described as "one of the few places that can be pleasant". It is surrounded by shops. On Reaping Day it has bright banners hanging on the buildings and camera crews perched on the rooftops. The rest of the houses are gray.