Abstract: Based on the empirical data of River Village, southwestern Hubei province and with a focus on the appearance and development of the illegal taxevasion farmland in River Village, this paper reports a study on how a village governed resources and dealt with changes. The authors analyzed the distribution and use of such important resources under governance like illegal farmland within the village, explained the formation, distribution, and the influence of such illegal farmland in interaction with the changes in farmers’ views of fairness on village governance, and discussed the internal governance logic at the village level. Illegal taxevasion farmland was a result from multiple factors including the space for rural social practices due to bureaucracy, the resources available to farmers’ selfexistential development, and the need of the village cadres for dispute mediation and resolution among the relationships within the village. The presence and distribution of the illegal taxevasion farmland manifested the protection of the grassroots government of the villagers as well as its exchanges with them when the state power is limited there, and at the same time, the ethical principles in grassroots governance. The township government pretended to be blind to the existence of the illegal taxevasion farmland in village, thus giving some autonomy to the village cadres for action using the land as a governing means in the absence of other types of valueadded governance means. Illegal land could be continuously reproduced and distributed in this process. In the governing practice of making the illegal land become a common collectively owned by the village representatives, its profits were shared by all community members. The property ownership of this type of resources strengthened the community identity and the status of the community, as well. When the ownership of illegal farmland was privatized, it benefitted the individual farmers more but eroded the shared value in the community.