Often in plays, the setting is not just "where the story happens," but includes the geographical, historical, social, economic, or philosophical...

Shakespeare sets the beginning of the play in Venice, which was a major Mediterranean seaport at the time. It was the city of cities—the place to be. Venice was, because of its position and its status, a cosmopolitan city and a hive of industry and social activity. It had become the economic hub of Italy, the focus obviously being on maritime trade and, as such, it attracted traders from all over the known world. In this regard, then, Venice had become a meeting place in which people from a variety of cultures, religions, and social contexts made contact with one another.

Venice had also gained prominence for its incredible wealth in art, literature, architecture, painting, music, and the many other art forms which flourished at the the time of the Renaissance. Venice, however, was a contradiction: on the one hand it presented an image of civilized behaviour, wealth, and prosperity, but on the other, it became a victim of immoral and corrupt action at all levels.

Furthermore, being an advanced society, liberal thinking flourished and even though women still did not have the same rights as men in this largely paternalistic society, they had more open-minded views about their role and felt more comfortable in expressing them. The inhabitants were exposed to different ideas and perspectives from around the world and obviously accepted or adapted those to their perceptions.

Within such a vast cornucopia of cultures, religions, and ethnic groups, it was natural for prejudice and bias to rear their ugly heads and it seems as if the Venetians, for the most part, disliked and even despised the presence of foreigners in their venerable space, especially if such persons had acquired positions of authority and power. They saw such individuals as an imposition and a threat to what should have been naturally theirs. This much becomes apparent at the beginning of the play during Iago and Roderigo's conversation and is later emphasized by Brabantio's reaction to their pernicious lie.

This setting, therefore, tells the audience that the characters they will encounter will be complex. The issues that these characters will have to deal with will be very involved and will depict the religious, social, moral, and political norms of the time. If the audience members understand the context, they will appreciate the nuances and suggestions conveyed by the characters' actions and their words and will understand the playwright's purpose with greater clarity.