Native = (1) Nowadays the noun native is usually used in formal styles to refer to the place where someone was born or to the country/region where a particular animal or plant has originated naturally: ‘He is a native of Montreal.’ ‘The island is home to several native species of plants.’ (2) inborn; innate: ‘She has a native ability to learn quickly.’ (3) found in nature in the elemental or unadulterated form; unaffected: ‘Native copper’
To refer to the people who live in and around a village, town, or city, and have shared interests and activities, use local residents, local population or (in formal styles) locals: ‘Local residents are against the motorway proposal.’