Setting serves many functions within a narrative. Descriptions of the setting ground the reader and allow them to picture the characters interacting within a given environment. The setting can convey the emotion of the characters and set the tone or mood of the story. Even weather can be important. For example, gothic stories, like Stephenie Meyer's Twilight, use dreary, rainy locations to offer a sense of foreboding.

Setting description also functions as a transition between one time and location and another. When moving to a new scene, or starting a new chapter, we always need to orient the reader, to them know where and when they are now. The quickest way to do this is through a paragraph of landscape description.
 
Setting isn’t just the location your story takes place in; it’s also the time your story takes place within, the era. World building, or describing the world in which the characters live, is especially important in historical or science fiction stories, where the setting and era may be unfamiliar to the reader. Here, we really need to take the time to fully orient the reader about what the landscape looks like, how the character lives, what the culture is like.
 
World building is so important to historical and sci-fi stories, in fact, that they tend to be longer because of the extra space description of setting takes up. But even here a little goes a long way. A hundred years ago, a writer could get away with pages of setting description, especially at the start of a story or novel, before the story got underway. But that’s not the case anymore. We’re all so influenced by film that we just want that quick opening shot that lets us know where we are before we jump right into the story. So, be cautious of overloading your story with a pile of setting description. It can stall the story in the same way exposition does.
 
But remember that once you’ve established the setting, you want to offer the reader reminders of it, to keep the reader oriented. This can be as simple as having the character pick up a coffee cup in a kitchen as she talks. Objects and room decor are as much a part of setting as the landscape outside.
 
Want to know more? Here’s How to Craft Immersive Setting Descriptions.