A production set is a place constructed to create the illusion of a real or imagined place. In filmmaking there are many reasons to build or use a set instead of traveling to a real location. Factors such as budget, time, the need to control the environment, or the fact that the place does not exist can be reasons to film on a set. Sets are normally constructed on a film studio backlot or sound stage, but any place that has been modified to give the feel of another place is a set.
References
Production sets Wikipedia(Text) CC BY-SA