Paul,
This is my “take”. I don’t like to use the word “title to” but the U. S. Government had the original claim to all of the land in Arizona. (Treaties with Mexico)
They later passed various laws to distribute portions of that land but they still retain the claim to large sections. When Arizona gained Territorial status they remained under the purview of the Federal Government.
As far as “School Trust Lands”: When the U.S. began appropriating money for surveys that would allow certain areas to be opened for homestead or purchase by the public they original set aside Section 16 (Late 1700’s) in those surveys as School Lands. In 1850, Section 36 was added. In our timeframe in Arizona Territory, both Section 16 and Section 36 were set aside and not opened for homestead. These sections remained under the purview of the Federal government. People went ahead and established claim to the school lands and also lands not surveyed, by “possessory rights” [Squatting - Slang]. These claims do carry legal weight. They built improvements and tilled the land, ran cattle, etc. Also one squatter could pass along continuous possession to another squatter, known as "tacking".
When Arizona was granted statehood in 1912, the “School Lands” were included in the land transfers and the state became the custodians. This created a real stink for the people who claimed the land by possessory rights. It started a lot of legal and political maneuvering to establish exactly how these rights were to be handled and it continued for years. I believe there were some other land concessions granted by the federal government to Arizona to settle some of these issues.
Maybe a simple example will serve to illustrate the process. Most were far more complicated!
Jacob Starrar had also established possessory rights to some School Land in Section 16, West of Waltz’s land. Whether he was the original claimant is not known. (At least I don’t know)
On August 17, 1882, Jacob Starrar sold the north half (80 acres) of the NW 1/4 Section 16 T1N R3E to A. L. Henshaw for $750(Deed Book 8 Page 182)
Henshaw would continue to claim the land for about 36 years before he was able to establish a legal title to the land (March 4, 1919) (Book 9, Page 378)
You will have to view the plat map referenced in the document and locate Tract #5 to verify yourself that this is the original land that Henshaw received from Starrar. I have not digested this instrument, but it kind of looks like Henshaw was getting the shaft!
I hope I have not strayed too far away from the facts but I’m sure there are some errors. Maybe it will prove somewhat useful for anyone trying to sort things out.
I am also still trying to sort out a lot of the details!
I’m always open for “sourced corrections”.
Garry
This is my “take”. I don’t like to use the word “title to” but the U. S. Government had the original claim to all of the land in Arizona. (Treaties with Mexico)
They later passed various laws to distribute portions of that land but they still retain the claim to large sections. When Arizona gained Territorial status they remained under the purview of the Federal Government.
As far as “School Trust Lands”: When the U.S. began appropriating money for surveys that would allow certain areas to be opened for homestead or purchase by the public they original set aside Section 16 (Late 1700’s) in those surveys as School Lands. In 1850, Section 36 was added. In our timeframe in Arizona Territory, both Section 16 and Section 36 were set aside and not opened for homestead. These sections remained under the purview of the Federal government. People went ahead and established claim to the school lands and also lands not surveyed, by “possessory rights” [Squatting - Slang]. These claims do carry legal weight. They built improvements and tilled the land, ran cattle, etc. Also one squatter could pass along continuous possession to another squatter, known as "tacking".
When Arizona was granted statehood in 1912, the “School Lands” were included in the land transfers and the state became the custodians. This created a real stink for the people who claimed the land by possessory rights. It started a lot of legal and political maneuvering to establish exactly how these rights were to be handled and it continued for years. I believe there were some other land concessions granted by the federal government to Arizona to settle some of these issues.
Maybe a simple example will serve to illustrate the process. Most were far more complicated!
Jacob Starrar had also established possessory rights to some School Land in Section 16, West of Waltz’s land. Whether he was the original claimant is not known. (At least I don’t know)
On August 17, 1882, Jacob Starrar sold the north half (80 acres) of the NW 1/4 Section 16 T1N R3E to A. L. Henshaw for $750(Deed Book 8 Page 182)
Henshaw would continue to claim the land for about 36 years before he was able to establish a legal title to the land (March 4, 1919) (Book 9, Page 378)
You will have to view the plat map referenced in the document and locate Tract #5 to verify yourself that this is the original land that Henshaw received from Starrar. I have not digested this instrument, but it kind of looks like Henshaw was getting the shaft!
I hope I have not strayed too far away from the facts but I’m sure there are some errors. Maybe it will prove somewhat useful for anyone trying to sort things out.
I am also still trying to sort out a lot of the details!
I’m always open for “sourced corrections”.
Garry
Not sure if he would be paying the county or Federal government since they controlled the land in the Territory. 
If it were today I think he would be leasing the land from the state.
must be 
