The study was initiated from the specific need to provide planners, managers and other GIS users with geographically accurate population data derived during the census surveying process. A basic assumption is that settlements can be digitally demarcated through an automatic classification process using spectral values from satellite imagery. The classification process was combined with a texture analysis to improve the accuracy of the automatic classification. The bulk of the investigation was to suggest a scientifically appropriate classification procedure and to evaluate the results using classifications derived from a combination of satellite imagery and orthophoto’s. The outcome of the automatic classification process proved to be highly accurate except for the high “chance” element when verifying results where only two classes are present.