The background is what is BACK and BEHIND the objects, subject matter, figures or forms of the composition. In life it would be what is farthest back that your eye can see. When looking out to mountains -- it is the mountains. When looking out to sea it is where the ocean and the sky meet and the whole sky too. It could start before the ocean meets the sky as well. Typically the background is in the upper third of your format or composition. I also like to refer to it as far ground since it is also the space that is farthest back. The three grounds then are the closest: foreground, the next closest: mid ground and the farthest back: background or far ground.