The Act of Settlement 1662 was passed by the Irish Parliament in Dublin. It was a partial reversal of the Cromwellian Act of Settlement 1652, which punished Irish Catholics and Royalists for fighting against the English Parliament in the Wars of the Three Kingdoms by the wholesale confiscation of their lands and property. The Act describes itself An act for the better execution of His Majesty's gracious declaration for the Settlement of his Kingdom of Ireland, and the satisfaction of the several interests of adventurers, soldiers, and other his subjects there.
When the Rump Parliament in London passed the Act of Settlement 1652 after the Cromwellian conquest of Ireland, its purpose was two-fold. First, it was to provide for summary execution of the leaders and supporters of the Irish Rebellion of 1641. Second, it was to confiscate sufficient land in Ireland as was necessary to repay the loans advanced by the City of London under the Adventurers Acts of the 1640s to pay for the war, and to reward the soldiers who had engaged in the war, almost all of whom sold on their interests to third parties. By 1652 the policy was achieved by the confiscation of almost all Catholic-owned land in Ireland, something that also served to punish Irish Catholics for their rebellion and war against Parliament.
The Act of 1652 said (paragraphs VI, VII VIII) that anyone who fought against the parliament in Ireland during the civil wars would lose some lands.
In practice, Protestant Royalists in Ireland could avoid confiscation by paying fines, while Catholics could not. Although some Parliamentarians talked about deporting all of the Irish to Connacht, in fact, they only ever got around to the land-owning class. The 1652 Act ordered that all confiscated lands east of the Shannon (Ulster, Leinster and Munster) be cleared and the inhabitants transplant themselves to the west (to Connacht and County Clare), to be replaced by English Puritans (who were later to be known as Dissenters). As a result of this Settlement, Irish Catholic landholding fell from 60% before the Irish Confederate Wars to 8–9% during the Cromwellian Commonwealth (mostly in Connacht).