Public officials are easy targets for parody accounts on Twitter.

Take the one that cropped up this week, based satirically on the employee photographed next to Kim Davis, the county clerk in Kentucky who was jailed for contempt of court after refusing to issue marriage licenses to same-sex couples.

Rob Ford, the former mayor of Toronto, has been mocked for his alcohol and drug abuse in a fake account online. Former Mayor Michael R. Bloomberg of New York was the butt of jokes over his Spanish language skills as @ElBloombito.

Most of the time, it is all in good fun. But in Illinois, a Twitter account mocking the mayor of Peoria turned what was apparently intended to be a running joke into a real problem, starting with warrants, a raid and arrests, and ending this week with an out-of-court settlement involving the Peoria man who created the account.

The case started when the man, Jonathan Daniel, created the Twitter account @peoriamayor, in March 2014, using a picture of the mayor, Jim Ardis, and linking to the city website.

Mr. Daniel labeled the account a parody several days after it was created and after tweets had been sent out. The account has since been deleted, but The Journal Star of Peoria reported at the time that it had references to sex and drug use.

Soon after the Twitter account appeared, Mr. Ardis told other city officials in an email, “i absolutely will prosecute. bring it on,” according to the newspaper.

In April 2014, warrants to obtain the name behind the account and to search Mr. Daniel’s residence were obtained. Up to seven officers raided the house. The account had already been suspended by then, but three people were taken in for questioning.

Mr. Daniel was not home at the time of the raid, but he was arrested at the restaurant where he worked as a short-order cook. He and the others were never charged in connection with the online account, but Mr. Daniel’s roommate, Jacob L. Elliott, was later charged with marijuana possession.

“I always thought that the Twitter account was a joke for me and for my friends,” Mr. Daniel said in a statement provided by the American Civil Liberties Union.

So Mr. Daniel sued in federal court, claiming civil rights violations. A copy of the complaint published by Arstechnica said that Mr. Daniel, 30, tweeted from the account from March 9 through March 19, 2014.

This week, the case was settled. On Wednesday, the city of Peoria announced it had agreed to pay $125,000. The city said it believed that it would have ultimately won in court but decided to settle because it would have cost several times that amount to continue the litigation.

It said Mr. Daniel and his lawyers would be paid in return for dropping their lawsuit. In addition, the city would issue a directive through the Police Department saying it recognized that charges related to false impersonation of a public official should not apply to online parodies or satires.

The settlement is expected to be approved by the City Council on Tuesday.

The case was the most recent example of a public figure in the United States taking action against a Twitter post or account intended as a joke, and then being challenged on grounds related to free speech rights.

Last month, a Federal District Court in Minnesota said a high school honor student, Reid Sagehorn, had adequately made a First Amendment claim in a civil suit after he was suspended from school for posting the words “actually yes” on his Twitter account.

Those words were a response to a social media posting that implied an amorous encounter with a teacher. Mr. Sagehorn told the authorities that he had meant the words in jest and that he did not intend for anyone to believe the post to be true.

A lawsuit over a parody account of a law firm in Michigan was dismissed in February after a judge ruled that it could not be interpreted as anything other than a parody, and therefore protected free speech, The Morning Sun of Central Michigan reported.