Depending on your textbook, this term may be used in slightly different ways. In all cases, “agenda setting” refers to the process of determining what issues people will care about and what issues they will think are irrelevant. Some textbooks might talk about agenda setting as something that is done by the media while others will talk about the ability of other actors, such as political officials or interest groups, to affect what is on the agenda.
At any one time in the United States, there are many issues that people might potentially care about. Typically, though, people (and the government) do not have the energy to care about many issues at once. That means that only a few issues can be “on the agenda” that the public cares about at any one time. Agenda setting is the process of determining which issues make it. An example of this would be how the Republican Party is trying hard to make President Obama’s handling of the attacks in Benghazi, Libya last year something that people care about. If they succeed, they have succeeded in agenda setting.
The implication of this is that any person or organization that can set the agenda has great power. They cannot really tell us how to think about a given issue, but at least they can get their issue out in the public eye where there is a chance that it will be acted on.