Land requisitions for urban development have led to a rapid growth of wealthy, autonomous villages in southern China. However, the underlying causes of this emerging phenomenon and its impact on local governance have been largely unexplored by the existing literature. Through an in-depth analysis of the contestations and negotiations between the local state and villagers when dealing with the various problems arising from land compensation, this study explains how and why land requisitions strengthened the collective power of villagers in defending their rightful interests. This bolstered power has in turn forced the local state constantly to adjust its tactics when addressing the needs of villagers in order to avoid widespread conflicts and potential social unrest. The findings provide new insights into the complexities of land conflicts and their actual impact on state–village power restructuring in southern China.