Indonesian forestry challenges in attributional land-use conflicts of overlapping villages and state forests have affected community livelihoods and forest sustainability for decades. This empirical research uncovers the socio-economic attributes of villages in order to gain a better understanding of people−forest relationships in order to guide improved forest management and governance for long-term sustainability. Data were obtained from 69 villages located in the forest management unit of Lakitan Bukit Cogong in South Sumatra Province. Spatially-explicit quantitative measurements and qualitative approaches were employed to explore the interrelationships between human footprint, village development, and conflict resolution strategies over two decades. The results confirmed that utilization of forest areas as part of the village territory (such as for building settlements, public/social infrastructure facilities, plantations and agricultural fields) has long been administered without permits, destabilizing forest functions. Moreover, aspects such as human population size, proximity of villages to the national road and sub-district capital, and the transmigration settlement units have an impact on the Human Footprint Index and Village Development Index. Furthermore, our analyses identified three distinctive forms of conflict based on village type: (1) villages which are administratively included in the forest area; (2) villages for transmigration settlement; and (3) villages adjacent to company management concession areas. In these villages, the clarity of land/forest boundaries and property rights are predominant conflict issues. Several recommendations are proposed to support sustainable forest development; namely, controlling human activities in the forest, improving village management governance, and resolving associated conflicts.