Erkan Settlement is located on the east coast of Xiyu, Penghu. It is a single-surname settlement gradually formed after the Chen family moved here during the Kangxi period. The local constructional materials of basalt and coral stone form a unique landscape with the surrounding environment. The Erkan Settlement is one of the historical preservation events in Taiwan. In the 1980s, tourism was developed as a "folk village". By 1989, under the decision of the Ministry of Culture, it was readjusted to "settlement preservation" as the main policy, and it became the first case of traditional settlement preservation district in 2001. This article takes the Erkan settlement as an example, first to explain its development, and then through the discussion of the differences between “folk villages” and “cultural villages”, to understand the significance represented by the preservation of Erkan settlements.