The setting of “The Outcasts of Poker Flat” is absolutely central to its plot. In its depiction of the interactions of settlers with their environment, it is a quintessential story of the Old West. Poker Flat, where the story begins, is a small, impoverished town where everyone knows each other’s business. That means that differences in people’s morals (a central theme of the short story) have a much stronger effect on the plot than they might in a larger, urban environment. Here, the narrator describes the town's newfound urge to rid itself of wrongdoers:
A secret committee had determined to rid the town of all improper persons [...] Mr. Oakhurst was right in supposing that he was included in this category. A few of the committee had urged hanging him as a possible example, and a sure method of reimbursing themselves from his pockets of the sums he had won from them.
Poker Flat is a small oasis of civilization perched on the edge of a dangerous mountain range, and the atmosphere within it is both oppressive and repressive, motivating authority figures to behave in strict and limiting ways to maintain order. The community is so small that many members of the "secret committee" have personally lost money to one expert gambler, and may all band together to banish him. This is especially ironic in its hypocrisy, as gambling is John Oakhurst's only real crime. The law has been taken into the hands of these citizens so entirely that a few people "urged to hang him," attempting to exercise the death penalty with no legal recourse.
American morality in the 1800s was quite conservative, meaning that people's lives could be uprooted for what others saw as objectionable behavior without much legal or official process. The “exile” of the characters from Poker Flat and their attempted journey through the mountains to a new home places them at the mercy of each other and of the elements. The atmosphere of frontier justice and interpersonal betrayal in Poker Flat endangers the lives of the characters who are exiled as much as the snow in the mountain pass they are forced to cross.
Changes in the world surrounding the characters, whether social, geographical, or meteorological, are the cause of their exile and their demise. The natural world outside the town is described as harsh but beautiful and absolutely unforgiving, as it is in many works of the American Realist genre. The scenery is majestic and austere, "singularly wild and impressive," but difficult to survive, as are the weather and the social environment.
