The moral or political background of the characters in a story is part of the
a. plot
b. setting
c. theme

I would have to say it's part of the theme.
Morality and politics is the ethos of the story, aka origin aka theme.
With-out a theme there would be no plot...and no setting.
So...
C. Theme 

I would say theme, because:
1. If there was no theme, there would be no setting, because all settings have a theme. For example, the witch lives in a candy house! Theme: Candy. Also, Harry's school has a theme: Being smart. People there learn to think and use their minds.
2. Without a theme, there would be characters, but plain and dull ones. Harry Potter has a theme: wizard. So do Ron and Percy, and a lot of others. Tobias in the book Allegiant has a theme: Bravery. It's not always about clothing, but about personality.  Tobias has a brave, confident personality.
Hope this helped!

His writing and speech is quite different than today’s. students struggle understanding because of unfamiliar words.