Settlement that obviously wasn't negotiated, initially (4)
I believe the answer is:
town
'settlement' is the definition.
'that obviously wasn't negotiated initially' is the wordplay.
'initially' indicates taking the first letters.
The initial letters of 'that obviously wasnt negotiated' is 'TOWN'.
(Other definitions for town that I've seen before include "See 1" , "Carmathen?" , "Tinsel- is sometimes applied to Hollywood" , "Person employed to make public announcements" , "Borough" .)