Very little information regarding the locale is provided in Shirley Jackson’s short story “The Lottery,” beyond the author’s reference to it as “this village, where there were only about three hundred people.” The action takes place in the town square, and it is summer, specifically, June 27, a “clear and sunny” day. Beyond that, Jackson leaves it up to the reader’s imagination to conjure images of the story’s setting. What is known about Shirley Jackson, however, allows for informed speculation. While she was born and raised in California, she and her husband, Stanley Hyman, moved to Bennington, Vermont, where he served on the faculty of the local college, in 1940. “The Lottery” was published in 1948. Given its small-town and somewhat bucolic setting, it is likely that Jackson’s image of the village at the center of her story was inspired by the New England environment in which she had been living. Similarly, one envisions her classic novel of gothic horror, The Haunting of Hill House, to be similarly set in upstate New York or somewhere in rural New England.
Although the date is clearly stated in the opening line of the short story, "The Lottery", by Shirley Jackson, the location is vague and ambiguous. The scene is described in the first paragraph as taking place in the town square.
The morning of June 27th was clear and sunny, with the fresh warmth of a full-summer day; the flowers were blossoming profusely and the grass was richly green. The people of the village began to gather in the square, between the post office and the bank...
We can only gather from the descriptive details here that the town square is near the center of the town in a community area. The flowers and green grass as part of the scene help to illustrate the point that it is in an outside area, not inside a building. The next paragraph also describes the town as being comprised of a small number of people which would indicate that it is not very large in scale or area, perhaps only 20 or 30 square miles. The mention of a tractor denotes that there is farmland near by where one would be in use. Apparently a rural area and there is also mention of a character in the story, Mr Sommers, who owned the coal company. This would indicate nearby coal mining, and a rural setting as well.
In another article here on enotes, about the historical and social context of the story, we learn from an interview with Shirley Jackson that the story is set in the very town she was residing in at the time. Not the place of her birth, but rather where she and her husband had relocated to, a town in New England.
Written in the wake of World War II and the ruthless killings and ethnic cleansing of millions of people, Shirley Jackson's "The Lottery" appeared in The New Yorker in 1948. The village created by Jackson parallels her village in Vermont. About these circumstances Jackson wrote,
I hoped by setting a particularly brutal ancient rite in the present and in my own village, to shock the story's readers with a graphic dramatization of the pointless violence and general inhumanity in their own lives.
Here, she clearly states that the story is set in "my own village", which we know to be in Vermont.