Can it be treated as insurrection against Federal Government, according to Insurrection act?
In strictly rational terms, it would be difficult to call this an act of insurrection. There has been no armed conflict, no declarations of independence or sovereignty, no expressed intention of overthrowing even the local government, and police and government officials are not being prevented from entering the area. Instead, Seattle police and officials have voluntarily withdrawn, boarding up their precinct building and allowing protesters to congregate freely. The protesters have 'won' in the sense that they wanted the right to protest freely, but that is all.
Of course, the President gets to decide what is and is not 'insurrection', and Trump has a demonstrated tendency to cast things in irrationally exaggerated terms, often referring to even the mildest opposition (for instance) as 'treasonous'. Whether that could translate into an invocation of the insurrection act is an open question, though I suspect it won't; as a matter of practice, Trump has regularly used threats and intimidation tactics, but has rarely followed through with overt applications of force. Further, since Washington state still has a fully functioning government on all levels, and that government is not itself rebelling agains the US, the Insurrection Act would seem to imply that Trump would need an invitation from the State Legislature or Governor to intervene on their behalf. Given the political orientation of Trump's base, Trump would probably not want to be seen sending Federal troops to take over Seattle against the wishes of both its citizens and its government
I'm a local, I've been in the zone the last couple days. I'm not qualified to give a legal or historical answer, but I want to make a few points about the nature of the zone, that hopefully can inform more historical answers.
It's not special.
The police of the East Precinct voluntarily left, they were not driven out (like Minneapolis 3rd Precinct was). There hasn't been looting or burning before or since. Businesses there are not boarded up. The protesters spew a lot of hateful rhetoric against police, but is very much a case of "all bark no bite" - police could come right back in if they wanted (EDIT: and in fact they have visited to inspect the precinct building)
A "militia" (the John Brown Gun Club, jbgc for short) has offered security to the neighborhood, and are the guys open carrying, working the barricades, and wearing body armor. They do not own the zone, and there are not many of them. They haven't fired their weapons, and they aren't standing guard against the police, as much as they're standing guard against threats from other citizens. There is a paranoid sense in the air that Proud Boys (or other phantom white nationalist groups) will infiltrate and perform some kind of dramatic terrorist attack; so the armed guards are there to deter that, or at worst respond in kind to any sort of attack - very much in the spirit of a "well regulated militia".
The people in the zone are not united in trying to oppose the City, and the protest leaders (such as Raz Simone and Omari Salisbury) are generally not as enthusiastic about the "Autonomous Zone" designation as some of the random protesters are (when I asked them yesterday, at least). They're mulling over how to proceed, but their main goal seems to continue to be police reform - not takeover. They're painfully aware that police are necessary to handle bad guys, and enforce laws that people agree are good. They explicitly do not want to be in the business of responding to domestic disputes or thefts.
Again, I cannot speak to the Insurrection Act itself, so this may not be a direct answer. But the news coverage of the zone, and its image on social media, is more dramatic than the zone actually is. A lot of rhetoric about what it is (and isn't) has been put out by both sides. If this constituted an insurrection, it'd be one of the least impressive in history.
EDIT: by "not special", I mean that the zone is not "occupied" so much as it is a big block party. You can walk right in - you're not frisked or anything. They make a lot of speeches, spray a lot of graffiti, and make grandiose tweets, but ultimately it's disorganized. Any list of demands or statements that you see are generally written up by some random few people who probably aren't in touch with many others. It isn't comparable to the Tamil Tigers or the PIRA taking a neighborhood and dictating terms for their territory.
It is the President who gets to decide. 10 U.S. Code §252 "Use of militia and armed forces to enforce Federal authority" says:
Whenever the President considers that unlawful obstructions, combinations, or assemblages, or rebellion against the authority of the United States, make it impracticable to enforce the laws of the United States in any State by the ordinary course of judicial proceedings, he may call into Federal service such of the militia of any State, and use such of the armed forces, as he considers necessary to enforce those laws or to suppress the rebellion.
As this is an explicit power given to the President by Congress, a question of whether a President can treat something as "insurrection" is almost certainly "yes". A court may give judicial review (is the power constitutional? is the use of the power reasonable, in the common law sense) But the short answer to "can the President call in the army?" is nearly always "yes".
Precedent is strongly against treating a sit-in as an insurrection. It was not done when sit-ins were much more frequent during the 1960's. It was not done in 2016 when a federal facility, the headquarters of the Malheur National Wildlife Refuge, was occupied for several weeks.