Firstly, the colon right after "certain rights to found families" does not make any sense as the items mentioned after are distinctly separate and not a part of the right to found families.
... certain rights to found families , to hold and inherit land, to form trade associations, to choose local village leaders, and to petition rulers.
Secondly, if you read a couple of lines before and after the quoted text, it becomes clear that "smallholders", as the name implies" were accorded and tended to possess the mentioned "minimal rights associated with small property".
To make a very long story very short, Homo sapiens has been around for something like 200,000 years. States were only "invented" roughly five thousand years ago, and until about a thousand years ago most of humankind lived outside anything that could be called a state. Most of those who did live within those states were small property owners (peasants, artisans, shopkeepers, traders). And, when certain rights of representation developed from the seventeenth century on, they were accorded on the basis of status and property. The large bureaucratic organizations that characterize the modern era may be originally modeled on the monastery and the barracks, but they are essentially a product of the last two and a half centuries. This is another way of saying that there is a long history of life outside the state and that life inside the state until the eighteenth century sharply distinguished between a formally unfree population (slaves, serfs, and dependents), on the one hand, and a large smallholder population on the other that disposed, in theory and often in practice, of certain rights to found families: to hold and inherit land, to form trade associations, to choose local village leaders, and to petition rulers. Relative autonomy and independence for subordinate classes thus came in two forms: a life on the margins, outside the state's reach, or a life inside the state with the minimal rights associated with small property.
That brings us to the no small matter of the verb dispose followed by the preposition of. I could try and - through some mental cartwheels - justify the use of "dispose" but I don't know what to do with "dispose of" which to the best of my knowledge (and I have double- and triple-checked this) has the sole meaning of getting rid of something (which can be extended to refer to dealing with a problem, or killing someone).
I have now read @Lambie's answer. As laid out above, I totally agree that smallholders possessed those rights. Problem is, I can't find any dictionary/source that has documented this sense of "dispose of".
In reply to the following (vague, dismissive and unfriendly) comment by @Lambie:
Yes, because to dispose of rights [to have the rights] wouldn't necessarily be in a dictionary. But it's all over google. By the way, I see you probably changed your avatar and now it does sounds like a medical condition.
I think I can't take the comment seriously for the following two reasons:
1. We are talking about a formal legal expression, so you would very much expect it to be recorded in the major dictionaries. The fact that it isn't should be cause for caution.
2. "It's all over the Internet" is vague and dismissive. Wouldn't the commenter be bothered to provide some sources?
Anyway, I had already looked up "dispose of rights" on the Internet and the results mostly pointed in a certain direction.
Exhibit 1 is from Cornell Law School website:
The Revised Code of the state of Ohio permits the Board of Trustees to retain, assign, license, transfer, sell, or otherwise dispose of rights to, interests in, and income from any such discoveries, inventions, or patents...
As you can see, here "dispose of" means "sell" (i.e. a way of getting rid of something you do not want or need anymore).
Exhibit 2 is from a wine company's website:
By virtue thereof, you dispose of the right to access, make corrections to and delete personal information relating to you that you may exercise at any time by writing to: Wines and Brands, 95, rue du Rajol 34130 Mauguio France.
Here "dispose of the right" means "to have at your disposal", but then this is a French company which brings in the possibility of language transfer issues as in French the verb "disposer" can mean "have at your disposal".
Exhibit 3 is from the World Bank website:
In addition to municipal land, municipalities can also dispose of rights to engage in more intensive land development—a higher floor space index (FSI) or higher FAR—as a way to “finance” and incentivize urban regeneration. Development rights generally refer to the maximum amount of floor area permissible on a zoning lot. When the actual built floor area is less than the maximum permitted floor area, the difference is referred to as “unused development rights,” “air rights,” or “excess density rights.” These excess density rights represent the publicly controlled share of privately owned land. These rights have economic value that can be sold by public authorities, which happened in São Paulo and New York City.
In the above, "dispose of" means "give away or sell".
Exhibit 4 is from Sabinet African Journals:
Every person shall have the right to acquire and hold rights in property and, to the extent that the nature of the rights permits, to dispose of such rights.
Again in the above "dispose of" means "give away or sell".
Exhibit 5 is from LégisQuébec, a government website:
Neither spouse may, without the consent of the other, dispose of rights held by another title conferring use of the family residence.
The same. "Dispose of" means "give away or sell".
Exhibit 6 is from Financial Conduct Authority, a UK government website:
instructing the operator to dispose of particular assets or assets of a particular description, to raise funds for purchasing other assets of any kind or to form a cash holding
You "dispose of" an asset to raise funds to buy other assets.
From what research I have done, I would like to - very tentatively - put forward the following theory: (But obviously I am open to being proved wrong.)
I think "dispose of" as recorded in all major dictionaries means "get rid of something you don't want or need". However, two factors may have caused it to be also used (you might say incorrectly or loosely) in the sense of "own or possess":
1. The LT effect:
In French the verb "disposer" can mean "have at your disposition".
2. What I am going to call the "extension" effect:
I think the occasional use of "dispose of" in the sense of own could have come from the fact that in order to give something away, you need to first own it. It you can give it away then you already own it. Therefore some users of the language started to loosely extend the meaning of "dispose of" to include ownership. (I personally consider this an aberration as I feel it will be an extremely confusing and detrimental addition to the language.)
To sum up, at the moment I consider the use of "dispose of" meaning "get rid of" as established use, and the use in the sense of "have or own" a peripheral aberrant use. It may one day become mainstream but at the moment based on the research I have done so far, I feel it's something I would certainly avoid.
I am but a poor non-native speaker of English, so if enough native speakers tell me I am wrong, I'll STFU and raise my hands in defeat.