It seems that by setting Watchmen in a real, non-fictional location,  New York City (present day when it was published), there is a greater opportunity to create an even more scathing commentary on current social and political issues.  As opposed to the Batman comics which are set in fictional Gotham, Watchmen becomes an even more cynical commentary on the social issues of the time.  The pre-Giuliani NYC of the 1980s had a much higher crime rate than the present NYC (obviously, present day NYC is not devoid of crime and violence) and we see the “grittiness” of that NYC reflected in the NYC presented in Watchmen.  With its references to violent crimes, murder, prostitution and plethora of x-rated venues, I don’t find Watchmen to be too much of a stretch in its portrayal of the environment at that time.  At the same time, the story really does play into the mythology of New York City as a dark, gritty, seedy place filled with despicable people.  Exterior illustrations of the city during daytime are still filled with shadows and dark color so far in chapters 1-3.  For example, the first panel of page 22 shows the sun rising between the buildings and sky scrapers yet the people in the streets are enveloped in black shadows and muted purples.

What is a bit bothersome to me is that in a city as diverse as NYC, Watchmen is really lacking (at least so far) in presenting its characters and society as multicultural.  That I can recall, so far I’ve only seen one black person and that isn’t until chapter 3.  The NYC setting shows some diversity in things like the Indian diner illustrated in the background of a panel.  To me, the lack of diversity is about as strange as the rest of the story of masked avengers and giant, radioactive (?) blue men.  Sidenote: I find Dr. Manhattan to be the most interesting character so far as he is the only Watchman with actual “superhuman” powers.