The setting is the place, location, time and etc. The setting could influence the characters to be a specific way. It's a key detail, and changing that detail could change the way the characters see, feel, or act. Often times, if the setting is changed, the entire story would be different. The plot also depends on the setting. Let's say you're in two different environments. A festive party, and a gloomy cemetery. Which one would you more likely hear laughter in? Which one with jokes? Sad weeping? Spooky noises? Which one would likely be a mystery about the death of a person? These are influenced by the setting.
If you need further elaboration, you can search up more examples.
