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We felt like this would more accurately represent freeing a captive population in this sort of military situation -- suddenly having civilians in the middle of the war zone is rarely a good thing, despite the fact that freeing captives is the morally upright thing to do (although, conversely you could make the argument that they are relatively safe under enemy control for now, and if you win the war they will all be freed).From a gameplay standpoint, the main function of these settlements is to make capturing a specific planet less desirable. This is a special unit for Homeworlder AI types, but they also show up at random on some planets in other games. Sometimes you have no choice but to capture one of these settlements, or maybe you want to free them on moral grounds, but otherwise (strategically-speaking) it's a good idea to avoid them. The purpose of them, therefore, is to create challenging decision points for the players on planets which would otherwise just be rotely captured.
Making Waves larger for having certain objects on a planet (like human settlements and Human Ion Cannons) was taken out quite awhile ago. The description for settlement just hasn't been updated methinks.
