A writer should hyphenate a compound modifier that comes before the noun it modifies. Take a look at this example: No one likes a <em>two-faced </em>person. As you can see, the modifier <em>two-faced </em>is hyphenated, first of all because it is compound (meaning that it has more than one word), and second of all because it comes before the noun <em>person </em>which it modifies.
What is it? The setting is the environment in which a story or event takes place. Setting can include specific information about time and place (e.g. Boston, Massachusetts, in 1809) or can simply be descriptive (eg. a lonely farmhouse on a dark night).