Before I go on, I'd like to stress I'm not trying to make any kind of peacenik point. I am not arguing, as some radical leftists do, that OMG ISRAEL IS APPARTHEID STATE. My views are fairly moderate on this issue (as a matter of fact, I voted for Likud in the last elections and I am seriously considering becoming a registered member of that party).
At any rate, you must understand that settler ideology is a mutated version of Zionist ideology: to wit, early Zionists believed that Jewish presence in Eretz-Israel had to be established by the practice of 'establishing facts on the ground'. For this, the early Zionists purchased or homesteaded land and built farms, homes, etc. on it. This worked fairly well, and the Israeli government continued this process with land that was seized in 1948. In 1967, there was an attempt, sponsored by the government, to establish the same process in The West Bank and Gaza. It's failed pretty roundly, in terms of the fact that the world has not accepted the legitimacy of our claims there, and Israel has de-facto recognized that we will eventually have to leave most of the settlements.
The settlers divide into two groups of people – those who live in the settlements because of the cheap land there, and those who live there because they believe in an ideology called Religious Zionism. I.E. these people believe that it is their divinely-inspired duty to reclaim more and more land by the methods outlined above. The term for this is 'capturing hills'.
Because of this, the settler movement continues building as much new settlements as they can on as many locations as they can, in order to establish Jewish presence. While the settler leadership formally condemns illegal construction, there remain groups of people who continue 'capturing hills':
I.E. people who go out and build homes, and entire small villages, without permission from the relevant authorities, and sometimes without being concerned whether a given Palestinian owns the land or whatnot. There's been repeated examples of the more… insane individuals physically assaulting Palestinians, IDF troops, attacking military vehicles, vandalizing Palestinian property, etc.
Right now, the government has been clamping down on settler activity in general, going so far as to prohibit all new construction in the West Bank.