What do you understand by the term 'settlement'?

Explanation:
Where people build their homes are the places that are known as settlements.
 Every human being lives on trees and in caves. When people started to grow crops, it became necessary to have a permanent home for survival.
Settlement can be permanent or temporary. Settlements which is used for a short time are referred to as temporary settlement. For example, people live in deep forests and hot and cold deserts. While in permanent settlements, people build homes to live in.

Final Answer:
Places where people build their homes for shelter are known as settlements.