This may be a more complicated situation than it appears. I believe Bundy and his family have been ranching there since 1870; it would seem that he has a right to the land. Possession is 9/10ths of the law, as it is said.
The complication may be: did the state of Nevada, through the legislature, cede that state land to the federal government, or did it just allow the feds to manage the land for limited purposes, while the state still retains sole possession of the land? There was an old case where a man committed a murder at a shipyard, which was occupied and managed by the feds, with state permission. However, the state never ceded the shipyard to the feds, thus retaining possession as state property. The man was charged in federal court with murder. The federal judge threw out the indictment; he found that the feds had no jurisdiction over the shipyard, as the state never ceded it to the feds. The man was then tried for murder in state court.
If Nevada ceded the land to the feds, the feds can pretty much do what they want with the land, unless there were limitations placed by the state as a condition for ceding the land. If the state still retains possession, the state has jurisdiction over the land; the feds do not.
