So, a setup is a word that you can often hear from people who are knowledgeable about technology, computers, or are engaged in creativity. In general, a setup means "configuration" or "arrangement" of something, usually referring to equipment or a workspace. Imagine that you are organizing a comfortable work corner for yourself: a computer, keyboard, mouse, headset — all of this together is your setup.
When we say that "setup is slang," we mean that such a word is used more informally. Youth gatherings, gamers, or bloggers love this term because it sounds cool and modern. For example, in the world of gaming, setups include everything that helps immerse you in the virtual world: from gaming chairs to special lighting.
Here’s another example: if your friend is a photographer, then his setup may include a camera, tripod, reflectors, and other things that help take great shots. So, the next time someone says "I have a new setup!", you will already understand what it means — the person has simply upgraded their equipment or changed their workspace.