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Eminent domain is the legal principle by which private property can be appropriated for use by a government.
As of 2265, exercise of eminent domain under Federation law (per the Federation Charter) faced several constraints. The world in question had to be within sovereign Federation territory, and either a UFP member world or an unoccupied planet. Even under these conditions, the rights of individuals (or free settlements on otherwise unclaimed worlds) superseded those of the Federation.
An attempt by Commodore Diego Reyes and Ambassador Jetanien at Vanguard to absorb Kessik IV by eminent domain and evict the independent colonists was overruled by the Starfleet Judge Advocate General Office in 2265. (VAN novel: Harbinger)