The setup act on my campaigns starts by giving the players a premise and a theme to create their characters and define the group with. The act continues in the first few sessions as the rest of the campaign world gets introduced. It finally ends when the players establish themselves in an area.
I use a wiki to jot down the premise, theme and any other pertinent information to the players. That information is used to create characters that better fit the campaign world and my GMing style.
With their character created, the players work on defining the group. The group template listed on the campaign items session gets used for that purpose. By having the group defined in such a way, the characters start the campaign fully acquainted with each other and ready for action.
Action is indeed felt from the very first scene as the players are thrown in the thick of things. They start the campaign by reacting to what is happening around them. At this stage, the players are introduced to secondary themes, general atmosphere, typical monsters, and some NPCs as well.
The setup act is done once the players establish themselves in an area. This area can be focused as a building, or general like a city.
Having the players consult the wiki for the premise and theme, they create their characters and define the group. The other campaign elements get presented in the first few sessions. The setup act ends when they finally anchor themselves to an area.