But I do know that even though my parents were indulgent, affectionate and warm, they still quite clearly set standards on how I was supposed to behave.

set 是动词，意思是"设定、规定"，在这里指父母对孩子的行为要求做出明确规定。 standards 是名词 standard 的复数形式，standard 指"标准、规范"，在这里指行为准则。 set standards 这个短语表示"设定标准"，指父母为孩子确立行为规范。