What do you see? Perhaps the device you're using to read this. Perhaps you have artificial lighting, or a window somewhere near, or a glow-in-the-dark teddy bear. How's the temperature? Hotter or colder than it ought to be this time of year?
All these things-- just what you can sense from wherever you are-- make up a specific setting. The time, the place, and the things you can sense are all part of it. I'm sure you've seen plenty of exercises about description and evoking the five senses, so I won't harp on that. Instead, I want to focus on setting creation: worldbuilding to make things interesting.
Now, this term has a bit of baggage. Worldbuilding is a term fantasy and science fiction writers throw around, but this is a YA blog. (It's in the name.) Not all YA is fantasy or science fiction. Admittedly, I write YA fantasy-- but worldbuilding is ultimately about setting, which is paramount to even the most realistic of fiction. No matter your genre, stick with me. I'll go through all the different parts of setting, and you can decide what you want to think about.
What time is it?
Time period goes hand in hand with genre. Historical fiction and historical fantasy are going to happen in the past, because the future and the present aren't history yet. Contemporary fiction or urban fantasy tend to occur around the present, because it's difficult to contemporize with people already dead. Dystopian and science fiction tend to deal in the future, with technology or society that we haven't reached yet. It's up to you how far you want to go into either the past or the future, but those are the major distinctions. As for fantasy... well, it tends to go everywhere.
As restrictive as all this seems, there's actually a lot of wiggle room. History is vast. The future is immense. The present... slightly less so, but there's still room to breathe. If you write a contemporary fiction novel set on this exact day (assuming you write extremely quickly), by the time tomorrow comes, it'll be outdated. Time is always marching forward, and you can't go back and rewrite a book to always happen in the present-- the present is always changing. However, we have ideas of the present that make it easier to manage in fiction. For instance, something that happened last year is technically the past, but in fiction it can still be called the present, because we can remember it. Similar with the near future; we can schedule shawarma for next week, which counts as the present because it's nearby. When it's within a couple decades of the true present, it counts as the present.
The same goes for all historical or futuristic stuff. In the space of a century, so much can change, even though, from afar, it seems so slow-moving. You do realize, right, that Julius Caesar only ruled for the space of a mortal lifetime? All his antics, being kidnapped by pirates and invading Gaul and crossing the Rubicon-- these were all as important to people living in the time period as present difficulties are to us. There is wiggle room, even when you're in a specific time period.
But what does time period do for your world? It gives you an idea of the technology, first of all. In the Stone Age, they didn't have cannons. No one had laptop computers in the 1920s. (I think I would remember those.) Five hundred years from now, will anyone actually use, say, paper books? Time period decides both what would seem too modern, and what would seem too outdated.
Especially in present-day fiction, where things get outdated so rapidly, it's important to know your time period. You're able to allow yourself to be outdated, instead of seeing it as a surprise. Many books we consider classics were written fifty years in the past, when events were still remembered, but the future was already decided. War and Peace, A Tale of Two Cities, The Three Musketeers, for example. They weren't quite historical fiction, but they were intentionally written slightly in the past.
There's no question time period is important, but I wouldn't call it the most important part of worldbuilding. No indeed-- in order to worldbuild, you must consider the world as well as the time it's experiencing.
Where are we?
This encapsulates the rest of setting. Where is it taking place? What are the physical landmarks, the kinds of technology, the cultural norms? Again, much of this can depend on time period in more realistic genres, but it's still important, whether in the large scale or in the small scale. For the present, ask yourself: where does the protagonist live? What's his or her school, or job? City, country, coast? What about politics? Entertainment style? The closer it gets to the present, the more culture and technology are going to approach ours, but if it's set ten years in the past, it could seem like an entirely different world.
As it gets into the past, worldbuilding gets more research-driven. Again, especially for historical stuff, the time period determines most of the world. But again, where does the protagonist live? What's it like at this point? Steaming factories all around, or just a cave in the mountain, or right under the Brooklyn Bridge? You're still building your world, but you have to gather it from what actually happened, then fill in the gaps.
As for the future, and in fantasy, building the world is a lot more fun. In both, the time period doesn't rule quite as much; in the future, humankind could have backslid in both culture and technology (The Time Machine, HG Wells, for example), or it could have soared into something nearly unimaginable. In fantasy, humankind could be absolutely anywhere in terms of culture and technology, mixing magic with industry (The Alloy of Law, Brandon Sanderson), or being oppressed by any Dark Lord you care to mention. That's what makes it so fun to brainstorm a fantasy novel, because almost anything can be true, depending on your imagination.
And what about flora and fauna? If you're in the real world, you'll have to figure out what country you're setting your story in, then research from there. If you're in the future, how have animals and plants suffered, or strengthened, based on your technology or human existence? If you're in a fantasy novel... again, anything goes.
Everything around you is part of the setting. Whatever genre you're writing, the worldbuilding-- or research, if you wish-- has to happen. Know your setting. It's nearly impossible to mess it up if you've done your research, created what you need to create, and stayed consistent with it through the story.
If, sometimes, you need a questionnaire or two to get you through these tough questions, check out Jill Williamson's list of worldbuilding resources. For historical or contemporary fiction especially, I'd suggest the Civilization Worksheet on that page. Questionnaires like that help you figure out the nuts and bolts before you run into problems.
For sci-fi and fantasy writers specifically, the rest of those worldbuilding resources are good, as are Brandon Sanderson's three laws of magic systems: understanding magic, limitations and powers, and expanding magic's influence. In case you were wondering, I used the terms technology and magic interchangeably throughout this post, so those three laws work just as well for technology in futuristic sci-fi as they do for medieval fantasy. (And I hope you SF&F writers forgive me for modeling this post toward other genres-- I'm sure you already know how to worldbuild by now. If not, check out those resources.)
One final disclaimer, no matter your genre: worldbuilder's disease is real. If you find yourself spending more time working on research, or on creating interesting new things, than actually writing, stop. It can be addicting. J.R.R. Tolkien famously spent twenty years figuring out the Lord of the Rings world before he wrote the trilogy. He also had a full-time job studying a similar time period, culture, and race. No matter how good your world could be, writing is always more important than worldbuilding. Now, in the month before NaNoWriMo, worldbuild all you want. When November comes, if you're not writing, woe betide you.
On that cheery note, I'll let you go. This was a long post, but I hope you gained much from it. Without a setting, you can't excel at description-- nothing to describe. Without setting, your characters can't do anything-- nowhere to do it. Without setting, you're missing one of the fundamental parts of storytelling. Worldbuild (in moderation), and make November a lot of fun.