Peace is a status which prevents other people from attacking you for a period of time.
Peace is awarded when your settlement is destroyed by an enemy attack, and the amount of Peace awarded is based on the amount of damage done to your settlement.
Peace runs out when the timer runs down or when you choose to attack another Settlement.
You can also purchase longer-lasting Peace with Gems from the Peace section in the shop! Purchased peace gets added to any peace you currently have, and multiple peace purchases can be stacked. There is also a cool-down on purchasing peace.