The setting is vital for the context and plot of William Faulkner's "A Rose for Emily".
Notice that the setting is talked about from a micro and macro perspective.
The micro perspective would view the setting exactly as the townsfolk narrator sees it, and as Emily would have seen it herself. This is Emily's immediate environment, which consists on a house that once was august and imperious. With the fall of the U.S. South, the house fell with it as well. Emily's family name, her pride and whatever due reverence was given to her family name also disappeared. This setting would be important because it shows the state of mind of Emily reflected in the decaying surroundings: She once belonged to the safety and glamour of the Old South, but now she does not.
It was a big, squarish frame house that had once been white, decorated with cupolas and spires and scrolled balconies in the heavily lightsome style of the seventies, set on what had once been our most select street.
At a macro level we see that all that surrounds Emily is also obliterated by the present. The new South is in full swing, and all the dreams and hopes of the past are officially over. It is time to either move on, or remain stagnant.
But garages and cotton gins had encroached and obliterated even the august names of that neighborhood; only Miss Emily's house was left, lifting its stubborn and coquettish decay above the cotton wagons and the gasoline pumps-an eyesore among eyesores.
Emily lives among memories. Remember that she had bought a wedding trousseau and had been ready for a future marriage to Homer. Once he was brought back to the house- never to leave it again- he, too, was one of the many fixtures of her past: her slave (manservant), the decaying house, and Homer's body were Emily's microcosm for as long as she remained alive.
Another observation on the setting is society at large. The townsfolk narrator, which is basically the people talking, see how the changes have affected Emily. The Griersons' staunch attachment to old rules and traditions completely impede Emily to move forward as an individual. In this case, the psychological setting (Emily's mind) is equally as important as the actual one.
Therefore, the geographical setting helps us see how the future looms and gets rid of all the old glory of the South. The setting of Emily's house reflects her mental condition: decaying, and stuck to the old. Finally, the social setting also reflects that Emily is out of tune with reality and that the townsfolk can witness it.