Settlement is crowded, I hear (4)
I believe the answer is:
pact
'settlement' is the definition.
(I've seen this before)
'crowded i hear' is the wordplay.
'crowded' becomes 'packed' (similar in meaning).
'i hear' indicates a 'sounds like' (homophone) clue.
'packed' is a homophone of 'PACT'.
'is' is the link.
(Other definitions for pact that I've seen before include "Alliance" , "Treaty, formal agreement" , "International treaty" , "deal" , "Agreement, bargain" .)