A settlement has several related meanings:

When people establish a new community in a place where few or no people lived before, that new community is called a settlement. The Pilgrims created a settlement at Plymouth in 1620. Pioneers moving west established settlements across the frontier. A settlement starts small, maybe just a few families, and can grow into a town or city over time. The word captures that sense of people arriving somewhere new and putting down roots.

The word also describes an agreement that ends a dispute or legal conflict. When two people disagree about something, they might reach a settlement instead of continuing to argue or going to court. If someone damages your bicycle, you might reach a settlement where they agree to pay for repairs. Legal settlements often involve one party paying money to resolve the conflict, but they can include other terms too. The key idea is that both sides agree to end their disagreement, even if neither gets exactly what they wanted.

In both cases, settlement suggests something becoming fixed or resolved: people settling into a place, or a conflict settling into an agreement.