Why is the setting of “Young Goodman Brown” important?

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The setting was important in two related ways. First, for the Christian colonists of Brown's period, the forest was the site of Indian activities, and that meant demonic/satanic activities. It was evil, looming right near by.

Second, the path which he walks is a long standing metaphor for life in Western literature (and other literatures, actually). Much like Dante at the start of The Divine Comedy, Brown walks alone through a dark forest, trying to find his "path" just as he is trying to find his literal path.

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