The setting of David Copperfield is almost like another character; in fact, we talk in more detail about the ways in which setting and location become tools for character development in our section on "Character Clues." So, we're not going to repeat ourselves too much here. What we do want to point out is that much of the book takes place in a series of interior spaces: for example, David's childhood house in Blunderstone, Mr. Creakle's Salem House, Mr. Peggotty's boat house, Miss Betsey's tidy cottage, Mr. Wickfield's home and office, David's apartment with Mrs. Crupp, and David's house with Dora. When people do go outside, it's usually a bad idea.
Take David's trip from London to Dover to find Miss Betsey. Young David is only around 11 at this point, and he's walking along the roads by himself. He's completely alone and broke. And during this period, David is aware that he's not just outside in the open air; as a homeless boy, he's also outside of society. As David is walking along, he hears the church-bells ringing. He realizes that, "the peace and rest of the old Sunday morning were on everything, except me" (13.16). In other words, while David is on the road, he doesn't belong anywhere. And that leaves him vulnerable to other wanderers, the "trampers" (13.42) he talks about – including the vicious tinker who punches the woman with whom he's traveling while trying to rob David.
Or how about the sea? It's the source of the Peggottys' livelihood. But it's also the sea that kills both Ham and Emily's fathers, James Steerforth, and Ham Peggotty himself in the end. We assume that it suits Dickens's sense of irony that James Steerforth, who seduces little Emily away by sea in a boat named after Emily herself, should die in his own boat. And it's also dramatic that Ham, who has been risking his life more and more since Emily has left him, should die during the same (beautifully described) storm that kills Steerforth. But the wildness of the outdoor setting has a symbolic value as well: both of these men, Ham Peggotty and Steerforth, have broken ties to their families. Emily has left Ham, and Steerforth has broken with his mother by running away with Emily. They are both literally and figuratively at sea.
So, being outside in England seems like kind of a chancy proposition for Dickens. Who knows when you might run into a bad-tempered tinker or a giant storm? It's much safer to be happily at home with your wife and kids – provided you're married to a nice lady like Agnes.
One more word about setting: you'll notice that Dickens spends a lot of ink describing the different cities and neighborhoods David visits, including Blunderstone (the site of his childhood home), Yarmouth (home to the Peggottys and the Omers), Dover (Miss Betsey), Canterbury (the Wickfields and Uriah Heep), Highgate (the Strongs and Mrs. Steerforth), and central London (Traddles and David himself).
But he doesn't lavish descriptions on the landscapes of Switzerland, France, or Italy – any of these places Emily, Mr. Peggotty, or David visit. There are a few lines here and there establishing where these characters are at a given moment, but the landscape of other countries is just not as present in the narrative as the landscape of England. It's as though what happens in those places is only important insofar as they affect the lives of people still in England. This is self-consciously an English novel, about English people and places.
The one exception is after Dora's death, when David comes upon "great Nature" in a valley in the Alps in Switzerland. But even then, David is looking at this Swiss valley and seeing the serenity that he gets from Agnes. And wouldn't you know it, as soon as he gets back to his hotel, he finds a packet of letters from Agnes. So, Nature is intimately tied to the characters in the novel: their thoughts, feelings, and behavior. And even in Europe, what matters most is David's ties to people back in the Old Country.
And as for Australia, well, poor Australia really gets the short straw: it basically comes across as a dumping ground for all of these people the narrative doesn't need any more, including the Micawbers and poor Emily. "Australia" seems to be Dickens's favorite destination for all of the characters who are fundamentally decent, but who no longer fit into English society. It's not a place with any realistic description or depth at all: just a place on the map where the extra characters get to live happily ever after.