On the basis of functions, settlements can be divided into two types – rural and urban.
Agriculture and allied agricultural activities like fishing, livestock rearing, lumbering etc., are most economic activities in rural areas.
The classification of land use in rural areas is done according to Land Records Department.
As per Land Records Department the land in rural areas is mainly used for activities related to agriculture, such as some land is under agriculture, some under permanent pastures and grazing lands or some under tree crops or culturable waste-land or fallow land etc.
Most of rural settlements are semiclustered or fragmented and small in size.
Primary activities like agriculture, lumbering, fishing, livestock rearing is more developed in rural settlements.
In rural areas, sometimes agricultural areas are converted into residential or industrial areas.
Many people in rural areas daily commute to city areas for work, thus rural and urban areas are connected with each other.
There is an area between rural and urban area which is called rural-urban fringe, rural settlements are beyond the rural-urban fringe.
