It's 10:00 PM; do you know where your story is?
Every story is set somewhere. Often, but not always, in more than one place. The extremes of this can be demonstrated by Agatha Christie's Murder On The Orient Express which takes place almost entirely on a train trapped by snow in Yugoslavia and Jules Verne's Around The World In 80 Days which takes place, well, in several places around the world.
The thing is, no matter where you set your story you'd better know something about the place. Poland and Paraguay are not interchangeable venues. The language, topography, society, customs, history ... everything about the place has an influence on the story, either subtle or severe. If you don't actually have significant knowledge of your chosen locale you will come across as a right Berk. You can either set the scene somewhere you're familiar with (even with that the pendants will nitpick), or learn a lot about the place before you set it down in type, or make the location entirely fictitious - and that can also provoke criticism from people who like to complain for its own sake.
Another consideration is how your characters relate to the setting. Are they natives of the land? Are they visitors? Some mixture of the two? In some cases you can get away with some ignorance by having them being as uninformed as yourself, although it gets a bit tiresome if no one in the cast picks up on any of the local customs. You don't want to repeatedly write: "I think he said 10 miles from here, but I'm not sure". Not even with a thousand variations. Especially not with a thousand variations.
This is where writers of fantasy have an advantage: since the world is of their own making, it can be any way they want. In fiction there is some latitude allowed, provided mainly by careful avoidance of telling details. The more factual you intend the tale to be the less forgiveness you will be granted for errors.
So when a couple of pals set out for a remote village to look over some property one of them has just inherited, it's okay to leave out the name of said village as well as the route and any landmarks or larger settlements that may be nearby. Leave people guessing where it is; some people enjoy trying to work out things like that from 'clues', even if the 'clues' are largely imaginary. But if the pals are visiting Paris it's important to know that the Eiffel Tower is not next door to Notre Dame Cathedral. And that neither one is in Paris, Texas.
However if the story takes place in an alternate reality ... (I really hate that excuse for non-canonical writing).
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