What is the setting of Atonement by Ian McEwan and its role in the novel?

There are actually multiple settings within Ian McEwan's novel Atonement. Let us examine them:

• Part I of the novel begins at the sprawling country estate owned by the Tallis family in England. The year is 1935, and war is looming. Despite this, the family seems to be enjoying the idyllic days—until Jackson and Pierrot run off and Robbie is accused of the rape of the twins' older sister, Lola, an act which he did not commit.
• Part II of the novel takes place in 1939. Robbie is about to be shipped off to France to fight the Germans in exchange for being let out of prison (he has since been found falsely guilty of the aforementioned attack). He meets briefly with Cecilia in London before departing, at which point we follow his perilous experience in the war.
• A little later—and again in London—Briony is serving as a nurse, Lola and Paul Marshall (the actual rapist) are about to be married, and Cecilia and Robbie have been reunited. 
• Part III of the novel is set in 1999 in London, England. Briony, who has been diagnosed with a degenerative mental disorder which will eradicate her memory, is headed to the manor in Sussex, which has since been converted into a hotel. It is revealed that she completely made up Part II of the novel as a means of alleviating—or atoning for—her guilt over allowing Robbie to be arrested for the rape of Lola. Part II of the story is simply part of Briony's novel; in reality, both Robbie and Cecilia died during the war. 

Thus, we can conclude that the settings play an important role in tracing the fates of each of the novel's characters, as well as in further convoluting the truth around the events that occurred in their lives. 

What is the conflict in Ian McEwan's Atonement?

The conflict in the novel Atonement is that the protagonist, Briony, a 13 year old prodigy novelist falsely makes the accusation that Robbie, a friend of the family and a potential boyfriend for her sister, Cecilia, had raped a woman named Lola.

Briony may not neccesarily have acted out of malice,  but mostly out of a bout of immature jealousy over seeing her sister and Robbie in a compromising situation. Yet, when she allowed her anger to take over and accused Robbie of being the rapist of Lola, he ended up spending 3 years in jail before going to serve in War, and he also lost Cecily.

Hence, the quest for Briony to obtain atonement (redemption, forgiveness of self) and she carried on Cecily and Robbie's unfulfilled dreams through her writings.

What is the setting of Atonement?

The story starts at the Tallis estate in the countryside of England in 1935, shortly before World War II. It is still a time of great class divides, and Cecilia Tallis's love for her childhood friend, Robbie Turner, and his love for her are notable because she is wealthy and he is the son of the housekeeper and from a different social class. Briony, Cecilia's younger sister, misunderstands their relationship and falsely accuses Robbie of rape.

By the second part of the book, the setting has changed to 1940, the beginning of World War II. Robbie, after being released from prison, has joined the British Expeditionary Forces and is fighting in France. He makes his way to Dunkirk, where he is to be evacuated to England. Briony and Cecilia are also in London during this part of the book.

In the last part of the book, Briony is in her late 70s, and it is many years later. She is a famous author during times that are roughly contemporary with the publication of the book in 2001, and she reveals what happened to Cecilia and Robbie during the war many years before.