UK firm WebHound have been discovered registering .co.uk domain names for 15,000 UK villages at a cost of £5 each, and attempting to resell to the villages at 100 times the price.
According to the BBC, the Scottish village of Balfron discovered the pirates when it tried to register balfron.co.uk - a fairly unique name.
UK case law has sufficient precendent to cover domain name squatting of known brand names, but it's not certain what the implications are for place names.
Here's WebHound's address. LART at will.