Simplify the following text for a Grade 7 native English-speaking person.
Original: Historically penal colonies have often been used for penal labor in an economically underdeveloped part of a state 's ( usually colonial ) territories , and on a far larger scale than a prison farm .
Simplified: A penal colony is a settlement used to hold prisoners and use them for working in part of the state 's ( usually colonial ) territories . This is much bigger than a prison farm .