The term "Settlement" is usually preferred over "Colony" to avoid association with the excesses of the colonial period on Earth.
The technical argument is that there are currently no inhabitants of the Moon so it does not meet the historical description of a colony.
Another distinction is that Colony refers to "people who settle in a distant land but remain under the political jurisdiction of their native land." I do not think a tie back to a nation state on Earth is the defining element of a lunar settlement.
I support the sole use of "settlement" and feel we need to standardize on it. Having two phrases can split up inquires unnecessarily.
--Jriley 14:36, 29 July 2007 (UTC)