what is the background of "the rest of the town starts to arrive at the tomb , including lord capulet and lord montague . friar laurence explains the whole story , and romeo letter confirms it . the two families agree to settle their feud and form

Prince Escalus arrives at the tomb, accompanied by the City Watchmen and the patriarchs of the feuding families. Lord Montague announces that Lady Montague has died from a broken heart as a result of Romeo's banishment. Friar Laurence then explains what has happened to Romeo and Juliet, and Balthasar gives the Prince the letter from Romeo, which confirms the Friar's tale.

To make amends for Juliet's death, Lord Montague promises to erect a golden statue of her for all of Verona to admire. Not to be outdone, Capulet promises to do the same for Romeo. The Prince ends the play by celebrating the end of the feud, but lamenting the deaths of the young lovers, claiming, "For never was a story of more woe / Than this of Juliet and her Romeo" (5.3.308-9).

I'm not sure what you mean by background. The Prince has already warned the familes to end their feud. The families, unwilling to let go of past grievances end up grieving together over the deaths of their children. In the end, the two families continue in their attempts to better each other.... thus the decision to erect statues. It seems that even after the death of their children, they still can't seem to put away their conflict. They just let it take another form.