verb
BAD : The bathroom was already inhabited.
GOOD : The bathroom was already occupied.
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inhabit = (usually passive) live in a place or area, especially for a long time or permanently: 'The island is mainly inhabited by sheep.' 'The remoter mountain regions are still inhabited by indigenous tribes.'
occupy = use or live in a room, house or building for any length of time: 'Is that seat occupied?' 'The flat below was occupied by a young Sri Lankan couple.'