It is stated in the book Funds in the Khilafah State on page 79 (Arabic ed.), starting from the seventh line from the bottom of the page to the third line from the bottom, the following: "If the allocated land was uncultivated from the beginning of time, or it was cultivated and tilled then became neglected and uncultivated before Kharaj was imposed upon it, and the state had obtained the land in a legal manner and allotted it to a citizen, then its rule is like the rule of reviving uncultivated Kharaji land, it belongs to whoever revives it and secludes it, it's neck and its benefit if he is a Muslim and 'Ushr or half of the 'Ushr is due on him for it."
And the question is: Is it not the correct word 'Ushri instead of Kharaji that is underlined?
1. It seems that the confusion arose because you thought that the revival of dead (barren) Kharaji land that had not been subject to Kharaj became 'Ushri. However the matter is not so, since it becomes 'Ushri for the Muslim, but it remains Kharaji to the Kafir.
However, the revival of dead (barren) land that has had Kharaj imposed on it does not take away its attribute of Kharaji, whether the 'reviver' (cultivator) be Muslim or Kafir.
The book The Economic System on p. 133-4 Arabic ed. (corresponding to p.137-8 English ed.) states the following:
"Whoever cultivates a dead land of the 'Ushri land, he owned its neck and its benefit, whether he is Muslim or non-Muslim. For such land, the Muslim landlord is obliged to pay the Zakat ('Ushr) of the plants and fruits, which are entitled for Zakat once the amount of the harvest reached the Nisab. As for the non-Muslim landlord of such land, he pays the Kharaj, not the 'ushr. This is because he is not one of those who are subject to pay Zakat and because the land cannot be left devoid of a payment, either Kharaj or 'Ushr.
Whoever cultivates a dead land in Kharaji area where no Kharaj has been put over it before the he owns its neck and its benefit if he is Muslim. If he is non-Muslim he owns its benefit only. The Muslim landlord of such land is obliged to pay the 'Ushr with no Kharaj on him. While the non-Muslim landlord has to pay the Kharaj, similar to that put on its kuffar inhabitants at the time of its conquest.
Whoever cultivates a dead land in Kharaji area where Kharaj has been levied before it became dead, he owns its benefit only without owning its neck, whether the landlord is Muslim or non-Muslim. Such a landlord is obliged to pay the Kharaj because it is a conquered land. Therefore, the Kharaj remains on it at all times, whether owned by a Muslim or non-Muslim."
In The Introduction to the Draft Constitution in the explanation of Article 133 states the following:
"And whoever revives dead (barren) land in the Kharaij land that has not had Kharaj imposed on it, it becomes 'Ushri land (and has Zakat) if the reviver is Muslim, and the land is Kharaji (and Kharaj is imposed) if a Dhimmi revives it." End
The book Funds in the Islamic State on p. 42 Arabic ed. (p. 44-5 English edition) at the statement about 'Ushri lands states the following:
"Every barren (dead) land that a Muslim has revived. He said:
«من أحيا أرضاً ليست لأحد فهو أحقُّ بها»، ورواه البخاري بلفظ: «من أَعْمَر أرضاً ليست لأحدٍ فهو أحق».
'Whosoever revives a land that belongs to nobody then he is more deserving of it'. Bukhari reported the same Hadith with the words: 'Whosoever inhabits a land that belongs to nobody, he is more deserving of it'.
And this 'Ushri land remains 'Ushri, and does not change in to Kharaji except if a Kafir purchases 'Ushri land from a Muslim. Then he must pay Kharaj, and he does not pay the 'Ushr, because the 'Ushr is Zakat, and the Kafir is not from the people of Zakat, because it is a charity and purity for the Muslim, and the land must not be devoid of a function, either 'Ushr or Kharaj."
Accordingly, pertaining to your question "Is it not the correct word 'Ushri instead of Kharaji that is underlined?", rather it is correct that it should remain "Kharaji" because the issue is about allotting in the Kharaji lands if the land was barren and without previously imposed Kharaj.
And it is mentioned in the paragraph that you asked about in this chapter, and a few lines before it is the following: "But if the allotment was in Kharaji land – which is all the lands conquered by force such as Iraq and ash-Sham and Egypt – it is viewed...), and then begins with the details, so the subject is pertaining to the allotting in the Kharaji lands.
This is with the knowledge that reviving barren land in the Kharaji land and in the 'Ushri land makes the land 'Ushri if the reviver was a Muslim. And if the reviver is a Kafir then the Kharaji land remains Kharaji and the 'Ushri land remains 'Ushri, but he pays Kharaj in both cases because 'Ushr is Zakat and it is not taken from the Kafir, and the land does not lose its function, so Kharaj is taken for it from the Kafir.
21 Safar 1434 AH