Asians that mostly settled on island (5)
I believe the answer is:
thais
'asians' is the definition.
(Thai is an example)
'that mostly settled on island' is the wordplay.
'mostly' means to remove the first letter (1).
'settled' indicates anagramming the letters.
'on' is a charade indicator (letters next to each other).
'island' becomes 'is' (abbreviation).
'that' with its first letter taken off is 'hat'.
'hat' anagrammed gives 'tha'.
'tha'+'is'='THAIS'
(Other definitions for thais that I've seen before include "Opera" , "Natives of former Siam" , "Asians" , "Siamese people" , "orientals" .)