The narrator is very specific about the location of the mill where most of the action takes place in "The Reeve's Tale": it's "at Trumpygtoun, not far from Catebrigge" near a little brook with a bridge going over it (67). From a practical standpoint, this makes sense: a mill needs to be close to a water source in order to power its grinding mechanism. This mill's location not far from Cambridge, a university town, means that the narrator can use the interaction between the more learned, scholarly clerks with the lower-class miller as a source of conflict.
The setting at a mill puts the focus of the tale on the everyday economic transactions of a medieval village, which also become a source of conflict: the miller cheats his customers, leading the clerks to attempt payback. Even the sex between the clerks and Symkyn's family members is swallowed by this framework, described as "esement" (payback) for a wrong that's been done.
Another important setting in "The Reeve's Tale" is the bedroom of Symkyn's house. There's only one, which means that all the family members and their guests have to sleep close together, which provides the perfect opportunity for the clerks to extract their "esement" on the bodies of Symkyn's female family members. The setting of much of the tale in the bedroom also marks "The Reeve's Tale" as a "domestic" drama – one that's concerned with the day-to-day life and interactions of an ordinary medieval household.