Explanation of the Bundy Ranch situation and why the BLM is out of line.
To understand this, we have to go back to the original US Constitution and also Nevada's admission to statehood. In order for the BLM to assert any claim against Bundy for his use of the land in question, we have to consider whether or not the US lawfully owns that land. So the first thing is to examine the method by which the US can own property. As we know, the federal government is supposed to be constrained by the Constitution to only those powers specifically listed there. All other powers belong to the States and the people, respectively, according to the Tenth Amendment. The Constitution only allows for the creation of a District for the government to operate but also prescribes a means of acquiring land for federal use. The methods are via treaty with other nations, purchase from a state with consent of that state's legislature, and finally, eminent domain. Eminent domain would allow for the just taking with compensation of private property within the District or within any other lawfully owned federal property. The land in question originally belonged to Mexico but after our war with them, the federal government acquired much of the western US via treaty.
Now that we know how the federal government acquired the land, we have to look at their ability to maintain possession of it. When a territory becomes a state, it does so under equal footing as the original thirteen states. Nevada did not get this equal footing when it was admitted to the union. In 1864, Lincoln and the Congress of the time was waging a war against the seceeded states and had substantial debt. It was discovered that Nevada had a lot of silver and so the federal government admitted Nevada with the requirement that all land that wasn't privately owned would belong to the federal government. Upon admission to the union, a new state maintains control of all public lands except navigable waterways. To lose control of 86% of its land as a condition of statehood violates the Doctrine of the Equality of States as well as previous Supreme Court precedent. Unfortunately for Nevada, she had a spineless legislative body for about 100 years. In fact, it wasn't until 1979 that Nevada passed AB 413 into law as NRS Chapter 321. Nevada can not collect property taxes on that 86% of federally held land but must still provide infrastructure, schooling, etc. This essentially makes the federal government a state welfare case as they haven't ever paid a property tax on that 86% of land within Nevada.
In western states, there were no regulations regarding grazing on open ranges. The Bundy family had been grazing their cattle on that land since 1887. Well, because of range wars between ranchers, etc., it was decided that regulation was needed. The Taylor Grazing Act was passed in 1934 to regulate grazing on federal land. Eventually, this led to the BLM and their management of the federal lands. Bundy was paying the management fees and BLM was actually doing a lot of good at keeping the land up. However, the BLM lost its way like all federal agencies and started being used for political dealings. This led to the BLM switching from managing land to using the management fees the ranchers were paying in order to kick ranchers off the lands by reducing and suspending the amounts of animals that can graze the land. When the money no longer went to land management and instead into harassing ranchers, Bundy quit paying. He hasn't paid since 1993.
So there are a few key things at work here. The land should belong to the state of Nevada under the Doctrine of the Equality of States so BLM should have no legal grounds for even initiating this action against Bundy. There is also a legal concept regarding real estate called adverse possession. Under adverse possession, if a person is using property for a specified length of time (differs by state), and the use is known and against the will of the owner who does nothing to stop it, the disseisor can make a claim of ownership. Bundy should be claiming ownership rights in Nevada state courts since he has used the land for 20 years without federal government's permission.
TLDR: US gov lost claim to land with NV admission to US and Bundy has squatter's rights.