Milton is the place where the Hales move after Mr. Hale quits his job with the church. Milton is a fictional town, but it is based off of Manchester. It is basically the "North" part of North and South. The majority of the novel is set here. Margaret's initial idea of Milton is that it's ugly, cold, and the complete opposite of her beloved home in the South. The change in scenery spurs on Margaret's character growth, and also introduced her to different classes of people. She meets Mr. Thornton here. 

Manchester, the town Elizabeth Gaskell based Milton off of, was an industrial town. At the beginning of the 1800s, Manchester was a small town with about 10,000 populants. By the end of the century, there were 700,000. The reason for this massive shift was the growth of the cotton industry. People moved in from the country in hopes of higher wages, which were offered by the factory owners. The farmers that moved to the city did experience an increase in pay, but also more intense working hours (Griffin).

The contrast between the hopefulness of better living and wages with what we see from the working class in North and South is quite stark and adds depth of sadness to the family Margaret encounters. It also assists readers in understanding why the city is so overpopulated.