Final answer:
The setting in Chapter 3 of "Lyddie" refers to the physical location and time in which the events of the chapter take place and helps establish the context for the story.
Step-by-step explanation:
The setting in Chapter 3 of "Lyddie" refers to the physical location and time in which the events of the chapter take place. It helps to establish the context for the story and influence the mood and atmosphere. In the given reference materials, there is a description of a misty morning in a rural area called Eusemere, with a threatening weather and beautiful natural elements such as flowers. Later, the setting changes to a stormy and gloomy environment, possibly a hotel or business.