Leave one empty corner between buildings
You cannot build on an occupied corner or immediately beside a settlement or city. The rule applies to your own buildings as well as your opponents’. Along a simple route, settlement → empty corner → settlement is the minimum spacing.
Tiles are not the unit of distance. Two buildings can touch the same terrain tile and still be legal if they are far enough apart around its corners. Read the edges connecting intersections, not just the visual gap between pieces.
Connect the new settlement to your road
After setup, the chosen corner must touch one of your roads. The road and settlement are separate paid actions. Having the four settlement resources does not pay for any missing road segments.
During opening setup, road connection is not required before placing the settlement. You choose the settlement first, then place its adjacent starting road. This exception is why an isolated opening settlement can be legal.
A nearby opponent can remove your destination
Suppose you are approaching an empty corner and an opponent settles at the next connected corner before you arrive. Your original destination now fails the distance rule, even if your road already reaches it.
A planned road does not reserve land. Before spending another wood and brick, recheck the destination and an alternative site. Otherwise a road race can leave you with several paid segments and nowhere useful to settle.
Count your settlement pieces too
A player can have at most five settlement pieces on the board. Upgrading one to a city removes that settlement piece from the board, making another settlement available. Cities have their own limit of four.
If there is no highlighted settlement target, check these conditions in order: empty corner, empty neighbouring corners, your road connection, an available settlement piece and the correct phase. Only then check the cards needed to pay.