Caroline and her husband had had an argument last week, but as he was going to be away for a few days, they had finally settled their differences.

settled 是动词 settle 的过去分词形式。settle 本义是"安顿、安置"，引申为"解决（问题或争端）"。在这里表示"解决分歧"的意思，强调通过协商达成一致。