In this symbol, the diagram of a perimeter wall has the noun middle placed at its centre. Hence, Mahadevan's sign number 266 is an ideograph for the middle of town or city centre.
Illustrative Text Reference:
Mohenjo-daro: Seal: M-120 a: Jagat Pati Joshi and Asko Parpola, 1987: Corpus of Indus Seals and Inscriptions: Volume 1: Page 41: Collections in India: Suomalainen Tiedeakatemia.
Comment:
There is only one extant example of this Indus sign.
Image Credit:
Indus Script Sign Number 266: Sign List of the Indus Script: Iravatham Mahadevan, 1977: The Indus Script: Texts, Concordance and Tables: The Director General Archaeological Survey of India.