"the inhabitants of that city": and not those of a different city (found within it).
From here they ruled: (The members of) an ass-caravan or a camel caravan that goes from place to place and rested within it, and they were turned astray with them — If it camped there for thirty days, they are put to death by the sword and their possessions are lost; if less than thirty days, they are put to death by stoning, and their possessions "escape."
"lay waste it": to exclude the property (found in the city) of the righteous ones who live outside it.