cleaning up dead communities isn’t a great experience as it is today.
admins could purge communities, but this can cause unexpected breakages with other activitypub software that is more strict about cryptographic verification, as purging a community erases all information about it from the local instance, including the cryptographic private key. purging a community also only removes it on the local instance, so other instances would still have a cached (although possibly marked as deleted) copy of it. this would be the only method that frees up the name to allow creating a new community under the same name later on. locally this would also remove all posts and comments associated in that community, but other instances may think that they have users subscribed to the community and may still have posts and comments in there. this also means if a new community is created with the same name again, the local instance will still not know about older posts, but users on other instances might see them still, and the local moderator might be unable to interact with them at all, e.g. to potentially remove old problematic content.
the next option is removing a community as (instance-)moderator action. this will only mark the community as removed without further impact. regular users won’t be able to access the community on the local or any other instance anymore, but its contents are preserved in case it gets restored at a later point in time. the name is not released and there isn’t even an error message shown when trying to create a new community with the same name.
another option could be to “take over” the community and delete it, which is the act of the top community mod deleting the community (not a moderation action). in this case only the same top community moderator can restore it. this behaves mostly the same as removing it.
none of these options are good to use. imo purging should be avoided in any case, and the other options both require admin intervention to release a community later on and have no user feedback in lemmy-ui at this time, at least on 0.19.5.
for communities entirely without posts it is probably ok to just remove them and restore and transfer them if someone requests them. for communities with content the next best thing might be locking the community, potentially locking all posts if it’s just a small number, to prevent unmoderated new content in that community, and put up a pinned post asking people to reach out if they want to take over the community. otherwise, if the community was removed or deleted, all the posts and comments within them would also be taken down with the community.