What are the challenges associated with translating indigenous territorial demands into land policy? While most land policy prioritizes the economic utility of land, indigenous territorial demands call for governments to more broadly conceptualize the definition and utility of land. Since the 1990s, most Latin American countries have formally recognized a range of indigenous territorial rights and worked to translate these rights into practice. Drawing on the Chilean experience, this paper argues that these alternative conceptualizations of land and territory complicate the implementation of government efforts to recognize indigenous demands. Specifically, the insufficiently defined scope of the policy exacerbates tension between communities' territorial rights demands and the government's capacity to return land. This tension is gradually and bureaucratically resolved, hindering both the policy's ability to meaningfully respond to indigenous territorial demands and the government's objective of promoting rural development. Future discussions and research must consider how these competing conceptualizations of land affect indigenous and land policy.