After many hours of deliberation, the decision was taken to search every hut and if anyone was found in possession of the diary then they would be killed for having committed an act of theft.

possession 是名词，来自动词 possess（拥有、持有），表示"拥有、占有"的状态或事实。possession of something 指"拥有某物"。 在这个句子中，in possession of the diary 表示"持有那本日记"的状态，强调被发现时正实际拥有该物品。