There are several ways to incorporate setting into a piece, but possibly the most important advice is usually forgotten: setting is character.
Like your character, the setting has goals and obstacles, allies and enemies. It changes and progresses, fluctuates with the plot, and impedes and encourages characters. Being gifted with the sight of setting will permit you to see your world in a whole new light, understanding the nuances, depth, and history that gives it strength.
First and foremost, it should be noted that each setting has a personality. Take the mysterious and magical Hogwarts, for example, where staircases move, chambers contain basilisks, and walking past the same wall several times creates a room from pure imagination. Hogwarts is magical and playful, a place to make friends and call home—but it is also dangerous. Just like a person (or perhaps like an ogre if you’re a Shrek fan), a location is layered. What you see on the surface may not represent the intricate designs at play underneath, and while your character is fast asleep or has his back turned, the setting may just sneak in and play a mean trick.
Furthermore, a setting grows. Think about it. Is Middle Earth the same from the start of Bilbo’s journey in The Hobbit to the end of Frodo’s in The Return of the King? Absolutely not. It has been foraged and burned, rebirthed and revived. Settings have their own character arcs, their own obstacles that must be overcome. Oftentimes the end goal is simple: to survive.
Hence we can see how setting plays into the story itself. It directly impacts the events of a tale, but it usually does so in a subtle, quiet manner. Many locales tend to act as wallflowers, listening in and occasionally throwing weight into a story but keeping their characters off-page. But that doesn’t mean your setting can’t be flamboyant, loud, or obnoxious. Escape from Mr. Lemoncello’s Library and Disney’s Moana provide fantastic examples of settings that are lively, intelligent, and dangerous—without being quiet about it.
So take a deeper look at your setting. Make a 3-D version of it. Interview it. Find out if your setting is sarcastic or serious, witty or slow. What are its goals, its weaknesses and strengths? You’ll be surprised at what you find out.