If set theory is based on logic (being a first-order theory with equality), but such theories assume models which require a domain, which is a set, how is there no circularity in this construction?
Edit
Forget about models, even a formal theory (in terms of which a language is defined, in terms of which interpretations are defined, etc.) immediately uses the notions of sets and subsets: “there is a set of symbols, a set of expressions with a subset of well-formed formulas”.