In the Bundelkhand region of Central India people prefer living in compact settlement because of

Security or Defence reason.

The correct answer is Option (4) → Security or Defence reason.

Clustered Settlements: The clustered rural settlement is a compact or closely built up area of houses. In this type of village the general living area is distinct and separated from the surrounding farms, barns and pastures. The closely built-up area and its intervening streets present some recognisable pattern or geometric shape, such as rectangular, radial, linear, etc. Such settlements are generally found in fertile alluvial plains and in the northeastern states. Sometimes, people live in compact village for security or defence reasons, such as in the Bundelkhand region of central India and in Nagaland. In Rajasthan, scarcity of water has necessitated compact settlement for maximum utilisation of available water resource