This story takes place sometime between 1950 and 1953. We know this because it is taking place during the Korean War, which took place after World War II. The first paragraph of the story gives readers an important detail about the setting.

The northern village at the border of the Thirty-eighth Parallel was snugly settled under the high, bright autumn sky.

That 38th parallel is important because that is the dividing line between North Korea and South Korea. During the Korean war, villages that were located near that line repeatedly changed hands. Based on the wording of the first paragraph, I think the narrator is telling readers that the story is taking place in what was at the time South Korea. That is why it is a northern village. If the village was part of North Korea, then that village would be a southern village. Regardless, readers know that the starting village is one that is on the front lines of the conflict. The two main characters grew up in that village, and they wound up on opposite sides of the conflict. That makes sense based on the village's location. Many people were probably pro-north, while others were likely pro-south.

The bulk of the story does not take place in the village. Most of the story takes place on the road from the village. Songsam is taking Tokchae to another police station, but he decides to free his boyhood friend before reaching their destination.

This story takes place in Korea and is set during the Korean War. The war began in 1950 and ended in 1953. At the end of World War II, in 1945, the Soviet Union took control of Korea north of the 38th parallel. In this post World War II period between 1945 and 1948, the United States occupied Korea south of the 38th parallel. This led to the establishment of two governments: one in the north and one in the south. Note that at the beginning of the story, the narrator adds that the setting is in a village just north of the 38th parallel. This is the division between North and South Korea. 

Tokchae lives in North Korea and serves as Vice Chairman of the Farmer's Communist League. Songsam is an officer of the Public Peace Corps, a South Korean organization. When Songsam learns that Tokchae has been arrested and is to be taken to another police station, he offers to take him. Songsam is initially angry with his childhood friend, demanding to know how many people he's killed. But when he recalls their childhood and the temporary pet crane and how it escapes, he has the impulse to help his friend escape as well. Friendship overrides any notion of the national/cultural war between North and South Korea.