Reardan High School suffers from the insularity of the town itself. Reardan is an overwhelmingly white town. Though it is located next to the Spokane Indian Reservation, its citizens rarely make the effort to reach out to the American Indians living very close to them. Therefore, Reardan characters have very little experience interacting with people of other races, ethnicities, and cultures. This lack of experience may play into their inability to celebrate differences. Consequently, when Junior enters Reardan High School, he shakes up the town's comfortable insularity.
Due to Junior's trepidation about starting at Reardan High School and the students' initial reaction to him, readers of Absolutely True Diary of a Part-Time Indian can infer that the reservation and town have been separate for a long time, especially given the USA’s long history of discrimination and outright injustice towards American Indians. We see terrible prejudice towards American Indians from several Reardan characters, including Penelope’s dad, who threatens Junior when he finds out about Junior’s relationship with his daughter. Consequently, the longstanding history of racism towards American Indians influences the modern citizens of Reardan to not celebrate differences.
However, I think you can challenge this question itself, and I’d like to encourage you to consider how Reardan High School makes strides towards accepting difference. Many characters in the book, particularly members of the basketball team, are dynamic characters who challenge their own prejudices and learn to treat Junior as a friend instead of an outsider. Roger, the school’s star basketball player, eventually shows respect for Junior and helps him develop as a player. Gordy, who originally is unfriendly to Junior, becomes his best friend at Reardan.