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conflict or characterization
It usually doesn't. However, if the setting is integral to the story, it can affect the characters by forcing them to react to it.
Setting might affect conflict, but usually the conflict is separate. Setting is just where and when the story is taking place, so that can be anywhere and at any time. Conflict is based more on characters because it comes from what they desire and are prevented from achieving.
It is in the sky
Setting
Setting characterization refers to how a story's setting influences and shapes the characters within the narrative. It involves how the environment, time period, and location impact character development and behavior. By showcasing the interactions between characters and their surroundings, setting characterization can provide insight into a character's beliefs, motivations, and growth throughout the story.
setting
characterization can be helpful in understanding the story's theme
Exposition is the term for the manner in which an author introduces the characters in the story. This is also the manner for introducing the setting of the story.
setting bout the character
theme
indirect characterization