Outer 尸 - the indexing radical, picturing a person seated or reclining. Anchors 居 in the meaning of dwelling: a body settled in a place. Same body-at-rest family as 屋 (house), 屁 (rear), 层 (layer), 屏 (screen).
Inner 古 supplies the sound (gǔ → jū through a regular palatalization in this phonetic series) and adds a faint flavor of long-settled ancestry: a person dwelling on ancestral ground. Same phonetic family: 故 (reason/old), 姑 (aunt), 估 (estimate), 苦 (bitter).
