In which country does the action in Macbeth primarily take place?

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The three witches (weird sisters) in Macbeth tell Banquo that although he will never be king, his "children" (i.e. his descendants) will become royalty. This is a direct reference to the belief that Banquo was the ancestor of King James, the ruler during the time that Shakespeare produced Macbeth. In fact, Shakespeare's company performed the Scottish play for King James's court. There are many positive references to Banquo and to England in general. Without the English army, Malcolm (King Duncan's son) could never have defeated Macbeth. It's not very subtle--they are trying to get the point across that England is the savior of Scotland. The noble and generous English kingdom dispatches its own brave army to save the Scottish people from their own evil tyrant. 

It is also important to remember that there is another obvious political motive for the Scottish play. King James was trying to keep his dominion over Scotland as well as England. Scotland has always fought for political independence, but Great Britain as a political entity has always attempted to rule over the Scottish too. This play, in a way, solidifies the legitimacy of King James's rule over Scotland. It "proves" that he was a descendant of the Scottish, and of the noble Scottish at that. 

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Most of the action of the play takes place in Scotland. The play was most probably originally written for King James I of England who had originally been King James VII of Scotland. When Elizabeth I of England died without an heir, James, her cousin from Scotland, was invited to become the English king. He traced his lineage through the line of Banquo and that is probably why Banquo's character is much more noble that Macbeth's.  A small part of the play, when Macduff visits Malcolm, takes place in England.

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