Reside is a more formal word for live. It usually implies that you live in a place permanently or for a long time. In legal language, the place where you live is called your residence.
He resides with his elderly mother.
She grew up in London, but now resides in Frankfurt.
The word inhabit is usually used for population groups (not individual people) living in a particular area, and it is often used in the passive voice:
The desert is inhabited by nomadic tribes.
That village is mostly inhabited by fishermen.
If an area has no people living in it, then you can describe it as uninhabited.