This week's book giveaway is in the OO, Patterns, UML and Refactoring forum. We're giving away four copies of Refactoring for Software Design Smells: Managing Technical Debt and have Girish Suryanarayana, Ganesh Samarthyam & Tushar Sharma on-line! See this thread for details.
I think that compiler wants to prevent us - the first statement is useless - we do not do anything with int - just declaring, but when we add curly braces the situation is different. We have THE SCOPE of an int in which that variable can be used, so compier doesn't give any error.
Short answer.... it is simply defined that way. The JLS defines the body of a ForStatement as having a Statement. A LocalVariableDeclaration is *not* one of the options of Statement, hence, illegal for the first case. In the second case, a BlockStatement is an option for Statement, and a BlockStatement is defined to contain LocalVariableDeclarations, hence, legal.