The word has several meanings, based on situational contexts:
Occupation: Method of earning a living.
Occupation: State of residence in a building.
Occupation: Matter which is exercising the mind or using up personal time.
Occupation: Military presence in an invaded country.
Occupation is basically derived on human presence in a situation. A place or activity is said to be occupied by virtue of the presence of people. Conversely, people are said to he 'occupied' by a situation.