I'd trusted Sniffa's population figure for Grassington when deciding that it's the largest town in the park. Wikipedia and other sources all put the population of Grassington at around 1100. In which case, Sedburgh, with a population of over 2700 is the largest town. (It's just slightly bigger than that of Settle).
That, of course, assumes that 'largest' refers to the population of a town. If it refers to the area the answer might still be different!
Web-searching doesn't readily find the area of the towns which have been mentioned in this thread. If we can't find the areas I doubt that the quiz-setter could either. i.e. I'm reasonably confident that he/she is seeking an answer based upon population, in which case Sedburgh is your answer.