Green’s Dictionary of Slang

(US) to squat, to make a homestead.

1918		C.E. Mulford Man from Bar-20 114: Not satisfied with nestin’ on a man’s range, you had to start a little herd [DA].
1936		E. Barnard A Rider of the Cherokee Strip 61: We cowpunchers had not use for the boomers. They came into our country, plowed up good grass, and started to nesting and working like the devil [DA].
1939		J. Steinbeck Grapes of Wrath (1951) 77: Rosasharn, she’s nestin’ with Connie’s folks.