settlement n.

Middle English setlen, "become set or fixed, stable or permanent; seat, place in a seat; sink down, come down," from Old English setlan "place in a fixed or permanent position; cause to sit, place in a seat," from setl "a seat" (see settle (n.)). Compare German siedeln "to settle; to colonize."

From c. 1300 in reference to birds, etc., "to alight." From early 14c. of ground, etc., "to sink down, descend; cave in." By early 15c. (Chauliac) in reference to a liquid, "change from a disturbed or muddy condition to one of cleanness." By 1570s, of persons, "change from a disturbed or troubled state to one of security." 

It is attested by 1520s as "become calm" (but c. 1600 it also could mean, colloquially, "knock down dead or stunned"). The meaning "decide, set or fix as by purpose or intention" is by 1620s. The meaning "secure title to (property, etc.) by means of a deed, etc." is from 1660s. It is attested by 1733 as "put beyond dispute or establish by authority or argument;" hence "resolve, determine, come to a decision (1782).

The sense of "establish a permanent residence" is recorded by 1620s; that of "plant with inhabitants, colonize" is by 1702.

The old meaning "reconcile" (a quarrel, differences, etc.) perhaps is influenced by or merged with Middle English sahtlen "to reconcile," which is from Old English saht "reconciliation," from Old Norse satt "reconciliation."

To settle down (intrans.) as what married couples do in establishing a domestic state is by 1835 (settle alone in this sense is by 1718). The transitive sense is by 1520s. To settle for "content oneself with" is from 1943; Middle English also used settle (v.) in an intransitive sense of "come down in the world, become lower in estate" (mid-14c.).

common suffix of Latin origin forming nouns, originally from French and representing Latin -mentum, which was added to verb stems to make nouns indicating the result or product of the action of the verb or the means or instrument of the action. In Vulgar Latin and Old French it came to be used as a formative in nouns of action. French inserts an -e- between the verbal root and the suffix (as in commenc-e-ment from commenc-er; with verbs in ir, -i- is inserted instead (as in sent-i-ment from sentir).

Used with English verb stems from 16c. (for example amazement, betterment, merriment, the last of which also illustrates the habit of turning -y to -i- before this suffix).

The stems to which -ment is normally appended are those of verbs; freaks like oddment & funniment should not be made a precedent of; they are themselves due to misconception of merriment, which is not from the adjective, but from an obsolete verb merry to rejoice. [Fowler]

1550s, of mental states, "quiet, orderly, steady;" by 1640s of objects firmly fixed or established;" past-participle adjective from settle (v.). The meaning in reference to matters in dispute, etc., "determined, decided, or agreed upon" is by 1570s; hence settled matter (by 1790), etc., implying no room for doubt or question. Related: Settledness (for which see settlement).