Settlement crowded reportedly (4)
I believe the answer is:
pact
'settlement' is the definition.
(I've seen this before)
'crowded reportedly' is the wordplay.
'crowded' becomes 'packed' (packing is a kind of crowding).
'reportedly' shows a homophone (sound like).
'packed' is a homophone of 'PACT'.
(Other definitions for pact that I've seen before include "Written agreement between two states" , "Agreement, covenant" , "Formal agreement between parties or states" , "Treaty, formal agreement" , "Alliance" .)