Where It All Goes Down
Trivia time: a matryoshka doll is a special kind of Russian "nesting" doll. It's really a series of figures, each bigger than the next. The idea is that the little one fits inside the next biggest, which fits inside the next biggest, and so on.
Fascinating, we know—but what does it have to do with the setting of "Home-Thoughts, from Abroad"? Well, Browning is doing his best imitation of a matryoshka doll here. We actually get one setting nested inside another one.
We'll explain. The first setting is pretty straightforward. After all, it's pretty much the focus of the whole poem. The "home" in "Home-Thoughts" is… England. The speaker lets us know that right off the bat in line 1, and then he spends the rest of the time remembering what a swell place it is.
In particular, the speaker's memories are of the natural beauty of England's setting:
whoever wakes in England
Sees, some morning, unaware,
That the lowest boughs and the brushwood sheaf
Round the elm-tree bole are in tiny leaf,
While the chaffinch sings on the orchard bough
In England—now! (3-8)
This isn't downtown London he's talking about. Instead, he focuses on the pleasant scene of a bird singing in an orchard. The entire poem, in fact, reads a bit like a postcard. We see pear trees and swallows and buttercups—all that's missing is a "Wish You Were Here" sign.
That's essentially the point, though. The speaker wishes that he were there, in England, enjoying the natural splendor of the countryside. In this way, England is a kind of setting-inside-a-setting in this poem. It's like the smallest matryoshka doll that fits inside a bigger doll. And that larger, actual setting of the poem is, well… not-England.
We say "not-England," because it's not clear, exactly, where the speaker is in this poem. We know that it's a place where melons blossom in the spring, so it must be warm. Other than that, all we can say for sure is that he's not in England. Thanks to the wonders of biographical research, we know that Robert Browning wrote this poem while in Italy. Still, no mention of that setting—other than the melon flower—is directly made in the poem.
In the end, we can say more generally that this poem operates at the intersection of two abstract places, if not geographical ones: home and abroad. Our speaker is stuck in one setting (abroad) and so he's really missing the other (home)—the poor guy.