The settings.xml
file is part of the maven settings and is not specific to tomcat, though the tomcat-maven-plugin uses the servers defined there.
There are two locations where a settings.xml file may live:
The Maven install: $M2_HOME/conf/settings.xml A user's install: ${user.home}/.m2/settings.xml
The former settings.xml are also called global settings, the latter settings.xml are referred to as user settings. If both files exists, their contents gets merged, with the user-specific settings.xml being dominant.
You can find the exact syntax for defining servers in the settings documentation.