Hawker, what if the most powerful entity in the area (the state) explicitly denies that they own the now vacant land? To whom does the land now belong?
The idea of law is that it offers peaceful resolution in cases where both sides believe right is on their side and where they would have to otherwise resort to violence. In the case you describe, there is a probability that more than one person will believe he has a legitimate claim, arbitration won't work and it will come down to whoever can muster the most force.