Compound pictograph: the upper square depicts a walled settlement viewed from above, and the lower curved figure depicts a kneeling person - the inhabitants. A walled town with its people. The square is NOT
口 mouth despite the visual coincidence.
邑 is Kangxi radical #163 and the source of the right-side city radical
阝 in
都 capital,
郭 outer wall,
邦 state.