There is perhaps no genre where setting is more important than in horror. Environments can form a variety of atmospheres to keep the reader on edge, or even throw him off his or her guard. Done well, the setting can even become a character itself.
It all boils down to symbology. Take the stereotypical Stephen King Maine town. One’s immediate impression is one of small-town homeyness and intimacy. Everyone knows his neighbor and the crime rate probably requires a police force of about two people. However, as the genre elements begin to emerge, the idyllic surroundings are often revealed as a camouflage for darker truths. What do the townspeople talk about in hushed whispers when strangers are out of earshot? And just what manner of corruption is hiding under all that fresh white paint? The fact that at least some readers have grown up in such quiet towns, or can at least relate to such familiarity with a place, only adds to the effect.
The wilderness also has its own distinct flavor. Being in the woods is a removal from human civilization and the dominance of the species. In such a place, the characters’ resources are severely limited, increasing the sense of vulnerability, as well as isolation. The age and wildness of the place also factors in, dredging ancestral memories of being prey in a time when man was just another animal.
Gothic landscapes also offer a unique perspective. Castles and Victorian mansions are imposing by nature, lending to a sense of smallness and being swallowed up by the buildings. Again, age matters here as such places have seen so many lives start and end inside their walls. Abandoned or in disrepair, they take on the character of an oversized crypt for those who came before.
There are a number of different locations to consider, ranging from urban sprawl to space itself. So while setting may sometimes amount to little more than background, it’s important to remember the power it can wield, and the tone it can set.