I feel a bit confused with the Nomads Tile and hopefully someone can explain for me?
Is only 1 Nomad tile placed on each vacant space at game set up?
Yes, that's what the rules say.
When this tile is taken, is it replaced?
No rule says to do that.
When using it for an extra turn, what precisely is an extra turn? - do I turn up another terrain card and play?
You don't use a nomad tile to receive an extra turn. You may use its specific special action (once) during your following turn, and then it leaves the game (whether or not you actually choose to use it during your following turn).
So they are like location tiles which are single-use and must be used on the turn after you collect them.