IOS – If I didn’t activate the find the iPhone is it possible for the thief to reset factory settings

First sign in to https://icloud.com/find and see if you can remotely erase and then remove that device from the list of your controlled devices. That will quickly return the device to factory settings at the cost of having to set up the device again from a backup or from new.

If the device isn't connected to the internet, you may have to force the erase as follows by putting your device into Recovery mode to allow iTunes to restore the device.

1. Turn off the device by holding the Power button and sliding to power off.

2. Hold the Home button whilst connecting the device to your computer using the USB cable.

3. iTunes should detect a device in recovery mode.

4. Click the Restore button to restore the device.

   Once the device has been restored, you can go through the setup process, logging in with your Apple ID to disable Find my iPhone, and restoring from backup if you wish.

This and several items related to activation lock are covered in Apple FAQ and articles:

• http://support.apple.com/kb/HT5818

To restore a device using iTunes, iTunes itself requires an internet connection. Furthermore, the status of Find My iPhone is obtained from the device as well as Apple's servers—iTunes knows if the device you're attempting to restore has Find My iPhone enabled and will prevent the device from being restored. The only way to restore a device with Find My iPhone is to put it in Recovery/DFU mode, but then when the device is finished restoring, Activation Lock will be enabled when the device connects to Apple's servers which is required when setting up the phone.