This physical characteristic most affects regional settlement.

escarpments

ethiopian highlands

great rift valley

water

The correct answer is - water.

The water is the most important that enables the life of the humans, as well as most of the living organisms. Because of that, most of the settlements have been built alongside streams and rivers, so that there's enough and sustainable source freshwater for drinking.

If we look at the maps, we can easily notice that most of the settlements are alongside rivers, very often the size of the river determines the size of the settlement as well.