In Colonial times, the Western lands (present day Kentucky, Ohio, Tennessee, Indiana, Illinois, etc.) had been surveyed as early as the mid-1700's. George Washington as a young man was a surveyor and mapped out (and staked claims to) vast areas in western Virginia - areas that became Kentucky and Ohio eventually. So it was known, at least in general, what the quality of the land was and whether it would be suitable for farming.

Public sale of these lands was a major source of revenue for the early US government, as well as for the States, who at times received a share of the payments. There were endless problems for settlers due to inaccurate surveys, overlapping claims, and squatters, not to mention the fact that Native tribes often considered the lands to be theirs. Andrew Jackson and William Henry Harrison were among those who had to deal with issues related to bad or overlapping claims.

The Texas Republic in the late 1830's and early 1840's envisioned an onslaught of migration from slaveholders from the American southeast to settle the vast, empty lands there to raise cotton. But not enough settlers could be enticed there to help pay Texas' enormous debts; which is one reason why the Texans chose to annex themselves to the US.

But it is safe to say that many of the squatters who went west and settled lands without a claim did not always know what lands they were dealing with.