。
There was a crowd gathered around the speaker.
Literal
Speaker [possessive-の] surroundings [location-に] [topic-は] crowd [subject-が] was-forming.
人だかり is a vivid compound: 人 ('people') + だかり (from たかる, 'to swarm, cluster'). The particle stacking には is noteworthy — に marks location, は topicalizes it. がしていた uses する for a natural phenomenon (a crowd forming), a pattern distinct from English.