Eminent domain is a power of government, under English law and American law, to take private property for public use, such as building a courthouse or completing a highway. The basis for eminent domain is the assertion by the sovereign of power over all land in its jurisdiction.
Government attorneys now advise against using the term "eminent domain" in public notices by governmental entities to discuss and approve taking someone's property. Instead, the term "land acquisition" is less likely to spark the public outrage against an abuse of power by eminent domain.
Under the Fifth Amendment of the U.S. Constitution, the government must pay "just compensation" to the owner of the private property that is taken. However, "just compensation" usually does not include intangible values of the property, such as its business good will with customers or its personal sentimental value. Often "just compensation" is set by a condemnation hearing that does not even give fair market value.
In the decision of Kelo v. New London (2005), the U.S. Supreme Court allowed states to include "public purpose" such as increased tax revenues as a substitute for "public use" in eminent domain. This enables towns to take private property from homeowners and small businesses to give the property to large corporations. This sparked a public outrage and several state courts (e.g., Michigan and Ohio) have required public use, as have several state legislatures.
In 2006, on the one-year anniversary of the Kelo decision, President George W. Bush issued an executive order that would limit eminent domain takings to those that would directly benefit the public, and not merely for the benefit of private parties.
The term "eminent domain" was first coined by Hugo Grotius in 1625. [Note: in a mistake in the Merriam-Webster dictionary, it says the term originated in 1783.]