Dangerous Spaces is a book about places. Although nominally set in rural New Zealand, the settings have a sense of timelessness that transcends any particular place. The two primary settings are the family home on Wakefield's Point and the parallel dream world of Viridian. The two places coexist in parallel realities and at times cross over and influence one another.

The family routinely accepts that the family home is haunted. Broken appliances, quarrels, and delays in accomplishing projects are all attributed to the ghost of the patriarch of the family, Old Lionel. Molly, in the opening scene of the novel, laments the broken toaster: "How did a nice boy like you Illustration by Linda Thomas for Dangerous Spaces by Margaret Mahy. Viking: New York (1991).