Question: The inhabitants of a small city carved into the side of a cliff are blind and use echolocation to navigate.
There is a lot of empty space, around a kilometer of between the cliff side where the village resides and the other cliff side, in other words a 1km valley.
Will echolocation still work effectively in this kind of situation?

Answer: 
There are some exceptional real worlds cases of humans using echolocation, take a look at <https://en.wikipedia.org/wiki/Human_echolocation> to see a few. There are videos where people avoid obstacles, sink basket balls and take hikes along rocky paths. In a demonstration in a documentary I can't recall the name of Ben Underwood could even successfully detect small objects on a table, and he could distinguish wooden objects from metal ones . Most of these people are exceptional, in the sense that they discovered their ability and worked it out themselves. In your community though, echolocation is normal. IRL exceptional skills are probably normal in your cave, and the exceptional cases would be really cool. Finding a hanging rope to climb somewhere? No problem! Workers throwing bags of turnips to each other from a cart? Sure! Spear hunting? Why not? Spear hunting fish? Maybe.

As has been noted though, the resolution of echolocation is courser than that of eyesight, and this becomes a problem over large distances; you could compare it to a low-resolution camera where far away objects are eventually within the same pixel.
Also, over large distances sound is distorted, and reflections, wind etc will compromise perception. There will be some sound though, so people can probably "see" some blurry picture at least. If gravel, smooth granite, limestone, rough granite and slime-covered, moist granite all give of distinct echoes, you could maybe tell enough about far off structures to get a sense of direction, and if nothing else know what type of local environment you are in; though echolocation often assumes that the person using it makes the sounds themselves, the way in which surfaces reflect ambient sounds are important as well.

Also, like @CAE Jones and @Andrew point out, many places make distinct sounds by themselves. Playing children, dripping water or a smithy will all be little beacons which will help people navigate.

Let's also not forget the possibility of various hearing aids. Fairly simple parabolas can produce surprisingly focused beams of sound, and one could easily imagine these people using cones, tubes and various other shapes to direct, magnify and otherwise manipulate the sound according to their needs. This is not to speak of all the possible devices to generate special purpous sounds for certain types of echoes, or devices that detect certain sounds. All these aids, ranging from the equivalents of glasses or binoculars to observatories, would be either carried by people who need them, kept in most homes or stationed in certain buildings, maybe watchtowers.

This said, other senses would also be important. Except for touch, in the form of rails along paths where echoes are impractical and so on, I think foremost of heat. If you are outside on a sunny day, you can feel where the sun is and use that to navigate much longer distances, but even more miniscule differences could be useful. Does the cave become progressively colder the further in you get? Can you feel the difference in radiation from the warm opening of the cave from it's cold interior? There could also be differences in the behaviour and temperature of the wind depending on what your surroundings look like.
The power level of the echolocation signal in bats is similar to that of the sounds the human voice can produce (order of 100 decibels). This allows the animals to perceive objects over distances never recorded to be further than 20 meters. <https://pubmed.ncbi.nlm.nih.gov/22978903/>

Regardless bats have also specially adapted receiving organ devices. The better human echolocator I've ever withnessed was that on Stan Lee's show "Superhumans". A blind man who could slowly drive a bike in a silent parking lot.