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You have a world with a Problem. That's your setting. Why does the Problem matter to the character? How does it affect him? Your character must interact with the Problem - that's what the story is....
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#4: Attribution notice removed
Source: https://writers.stackexchange.com/a/45480 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#3: Attribution notice added
Source: https://writers.stackexchange.com/a/45480 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#2: Initial revision
You have a world with a Problem. That's your setting. Why does the Problem matter to the character? How does it affect him? Your character must interact with the Problem - that's what the story is. It follows that the more intimately the character is familiar with the Problem, the more he is affected by it - the more of a stake he would have in the story, the more he would care about interacting with the situation. The character having a stake means the readers too have a stake. We care about people we can empathise with, not about theoretical situations. "A million is a statistic." It is through the experience of a character that you show the reader a situation needs changing. It follows that you create your character to be the person who would take the reader on a journey through the problem, show it to us, let us experience it. Depending on the story you wish to tell, he might succeed or fail in taking action to change it.