If you have completed all researches then yes you can get rid of the settlement, actually you have to, because you need the space to build a new settlement for fairies in the next chapter. And so on every chapter.
There sometimes (not every chapter) is a quest to sell the portal that will give you diamonds, but that is no problem, you can just quickly build a new dwarven portal (the quest does accept any portal) and then sell it for the quest, if you sold yours too early. I think you don´t even need to wait for it to finish building, before you sell it, but I don´t quite remember that part, it´s been too long...