Refers to people living in the immediate vicinity or neighborhood. Often used in formal or community contexts.
Local residents have complained about the construction of the new factory.
To avoid trouble with the neighbors, I keep quiet at night.
近所 is a more casual, everyday word for 'neighborhood' or 'vicinity', while 近隣住民 is a formal compound specifically meaning 'neighboring residents'.
住民 means 'resident' or 'inhabitant' in general, without the 'neighboring' nuance.
Compound of 近隣 (neighboring, vicinity) and 住民 (resident, inhabitant).