。
She lives a few blocks from here.
Literal
She [topic-は] here [from-から] several-blocks distant place [at-に] is-living.
数区画離れた所 ('a place several blocks away') is a relative clause modifying 所 — the verb 離れる ('be separated, be distant') in the past form 離れた acts as a noun-modifier, the structural workhorse of Japanese descriptive language. 区画 ('block, parcel of land') is more often heard for grid-style city subdivisions, perfectly ordinary for North American-style neighborhoods but slightly bookish in Japanese cities, where address logic doesn't work in 'blocks' the same way — addresses are organized by 町/丁目/番地, with no grid-block convention. ~に住んでいる pairs the existence-location particle に with 住む ('live') in the resultative ~ている — 'is in a state of having taken up residence.'