To see Creating Setting Part I, go to Skulljuggler's post
The key thing to remember about setting is that it goes deeper than just location or political structure. Setting is an emotion. Setting is mood. A setting tells us whether we are reading a horror or fantasy, whether it is going to be a happy scene or a sad scene. There are several ways you can set the tone of the scene using setting and a variety of tones can be used from a single setting.
Let's take an example, a meadow for instance. If you wanted to make a happy scene or an idyllic scene you could have the meadow lush with green grass and sprinkled with flowers, a strong sun shining and a warm wind curling through the air. If you wanted a sad scene you could have the meadow barren or the flowers looking dull and droopy on their stalks, the air still. It lends a sense of oppressiveness, of loneliness. Now of course there are a variety of ways to play with different thematic devices, but most importantly, the most effective setting will reflect back on the character.
What I mean is simply this. To make a truly effective setting, you should consider how your viewpoint character feels about the place and what mood they are in.
For the first, consider how much different it feels for you coming home to your house where everything is yours and you set your own rules compared to going to another's house, even a close friend's. There are things there which have histories you don't even know. It is stiffer. Mostly polite. You are unsure whether or not you should move things. This varies, of course, depending on the level of friend and your own disposition.
For the second, playing on emotion, if you're going home after a long days work and are tired, depending on your disposition, you might take comfort in the familiarity of home, or you might feel oppressed by it. Going to a friend's house might be your place away from home, where you can crash and not worry, or it could be stiff and awkward and a torment, depending on how your feeling.
As a writer you need to be aware of both how you react to places and, in turn, how your characters feel. Different characters should be able to look down the same street and feel differently about it depending on their disposition, how they feel at the time and even the history that street carries for them. For example: a young man in a good mood who enjoys architecture might stroll down the sunlight street, looking at edifices and enjoying the sun on his face. Another young man who say had gotten mugged before might feel exposed in the sunlight and see only the shadowy alleys and the dinginess of the storefronts.
In summation, don't be afraid to use scenery as more than just a painted backdrop. Make it come alive. Make it mean something. Create layers so the readers can come back again to the same spot, same story, same words but knowing the characters disposition, can understand just a little more of the world you've laid out.