The most common and most likely answer to this crossword clue is the 8 letter word TOWNSHIP
I've seen this crossword clue in The Guardian
T
O
W
N
S
H
I
P
More clues leading to the result TOWNSHIP
- Settlement has hotel in rubbish place
- Community retains hospital surrounded by dump
- Settlement has hospital in remote area
- Heavyweight vessel holding whiskey in urban area
- Who isn’t irritated by parking in conurbation?
- Nowt wrong with singular joint settlement
- Origin of this personal transport for urban area
- Vet finally has joint settlement
- Community has hospital — dump seen on the outside
- People in the community enjoy silence after getting into the quarry from the east
Buddy explains!

The straight part
We know that "settlement" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case settlement = township.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does TOWNSHIP mean?
TOWNSHIP noun- The territory of a town.
- A subdivision of a county.
- (Pre 1994) An area set aside for nonwhite occupation.
- (Post 1994) A nonwhite (usually subeconomic) area attached to a city.
- A small town.