The part of a novel or story where we are introduced to the main characters and setting is the EXPOSITION.
There are always two kinds of setting: a setting in TIME and a setting in PLACE.
Usually, there are two kinds of characters. The hero is usually referred to as the PROTAGONIST while the villain is usually called the ANTAGONIST. Sometimes a character is both good and bad; these are called COMPLEX characters.
In a short story, a writer will leave little clues about what is going to come later. This is called FORESHADOWING.
When something unexpected occurs at the end of a story, it is called a TWIST.
The most dramatic part of a story is called the CLIMAX.