Where It All Goes Down
The "Clerk's Tale" is set in a medieval Italian village called Salucia (Saluzzo) in a province that encompasses the plain at the foot of a mountain. Our first view of Salucia is one of abundance and prosperity: it is "a lusty playne / habundant of vitaille," where one can behold many towers, towns, and other delightful sights (59-62).
However, not everyone in Salucia partakes of its abundance; while its ruler, Walter, enjoys an easy life filled with hunting and hawking, the poorest of the poor are hard at work at the margins of society, struggling to make a living from the earth. The setting of the tale in this medieval village allows its richest inhabitant, Walter, to come in contact with its poorest on his pleasure rides.
This setting also gives us a readymade audience for Grisilde's rise and fall from grace in the "peple" of the town who accompany her in a procession to and from the palace. The narrator and Walter both draw heavily upon this "audience" of townspeople: we feel their presence in Walter's allusions to their discontent with his common-born wife, as well as in the narrator's frequent descriptions of how they view Grisilde and his eventual castigation of them for their lack of loyalty to her.
The townspeople represent the ears and eyes of the people any nobleman rules, providing a constant reminder of the ruler's obligations to a bigger group than just himself and his immediate followers. The setting of the story in a medieval town—rather than in a more isolated rural setting, for example—is what allows for the presence of this audience; the story would hardly work without it.