In literature, the setting is the time, place, physical details, and circumstances (like weather) in which a situation occurs. The setting may also include the background or environment where the characters live and the action takes place. It usually means physical surroundings. The setting is important because it can help the reader envision the story and is very important to the mood of a story. Think about a setting in which it is a dark and stormy night. The characters are in an old house and the power has just gone out . This setting establishes the “feeling” that something scary is about to happen.