Setting is the time and place where your story is set. It can be as mundane as a typical suburban neighborhood or as exotic as a foreign country or alien planet. Remember, “exotic” to you might be the mundane to someone else, and vice versa, so you will have to rely on your skills of description to bring the setting alive.
Another term for setting is location, although that is more properly limited to the physical space in which the story is set. But setting involves much more – the time or era when the story is taking place (past, present, future); the passage of time, such as how long a period your story covers (a day, an hour, a character’s entire life); mood and emotion; physical location (for example, deserts, cities, planets, underwater algae farm, Victorian London); geography (the description of the physical location as related to nature – rivers, mountains, etc.); and weather and climate.
Additionally, your setting needs to be populated, otherwise there’s not much of a story. First, consider the people you’re writing about: are they human? It’s not a dumb question, because depending on your story you could be writing about protagonists who are fully human, paranormal creatures such as werecows, or aliens from another planet or dimension.
Use descriptions of the physical landscape (geography) and buildings to help establish your setting. It helps to look at photographs of locations when you’re trying to come up with descriptive text, but don’t forget to use sensory descriptions to make the place come alive in the mind of the reader. The beach may look wonderful, but what does it smell like? Is the breeze strong? Or hot, or cold? What kind of sounds does the protagonist hear at the beach? Does the sand crunch under his sandals, or get into his shoes and give him a blister?