When reading a literary work critically, first and foremost we must consider that work as a formal aesthetic object. That is to say, through the act of close reading we must pay heed to how the text is constructed both in terms of its genre and its own specificity. Who is the narrator and what is their point of view? What tense is it written in? How are the characters constructed in relationship to one another? What is the author's style like? These are all formal questions that we must ask (and answer) when we begin to read an imaginative work.
But even as we take form into prime consideration, the work of interpretation does no end there. All works of cultural production are shaped by the historical circumstances in which they are produced and received. If we fail to understand a text's context, we fail to understand the text in its entirety. Thus, when we read a work of fiction, we must take into account the historical forces that guided its production and its reception. In order to do so we must take three things into account.
First, we ought to understand the historical realities that the work depicts. While many novels and plays tell stories set in their author's present, many do not. We ought then to consider why the author chose this time for his or her setting? Could it be set in another era without much substantive change? What historical forces within the work influence its characters, its themes? In considering the time depicted we should not scrutinize it for accuracy. We are not reading histories. All writers take poetic license with the facts and no historical novel/play is under a strict contract to tell their reader the historical Truth with a capital "T." The most any writer can do is tell his or her reader the history as he or she understands it. If the writer has taken major liberties with the historical record, its far more interesting to ask what the effects of these changes are in terms of plot, character development, or theme. Quibbling over inaccuracies does not lead to a better understanding of the the work.
Second, it's important to take into account the time of the novel's production. When did the author write the novel? Over how much time? Historical works are often more about the time in which they appear than with the time they depict. Thus, William Shakespeare's The Tragedy of Julius Caesar is far more interested in his contemporary moment than with the trials and tribulations of Rome. With this in mind it's then important to ask how Shakespeare's views of the English monarchy influenced his depiction of Rome.
Third, we need to consider when the work was received. That is to say, we need to know when readers/audiences first got their hands on the text. While many works are published soon after their completion, other works are published long after their author has completed them or after some delay. However, considering when a work is received need not only limit our discussion to its initial audience. After all, we all are readers and we are well aware that we continue to read the works of the past. Therefore, we can also ask how later generations of readers understood a text and why.
