In Australian history, a squatter was typically a man, either a free settler or ex-convict, who occupied a large tract of Crown land in order to graze . Initially often having no legal rights to the land, they gained its usage by being the first (and often the only) Europeans in the area. Eventually, the term Squattocracy, a play on "aristocracy", developed to refer to some of these squatters.
The term ‘squatter’ derives from its English usage as a term of contempt for a person who had taken up residence at a place without having legal claim. The use of ‘squatter’ in the early years of European settlement of Australia had a similar connotation, referring primarily to a person who had ‘squatted’ on unoccupied land for pastoral or other purposes. In its early derogatory context the term was often applied to the illegitimate occupation of land by ticket-of-leave convicts or ex-convicts (emancipists).
From the mid-1820s, however, the occupation of Crown land without legal title became more widespread, often carried out by those from the upper echelons of colonial society. As wool began to be exported to England and the colonial population increased the occupation of pastoral land for raising cattle and sheep progressively became a more lucrative enterprise. ‘Squatting’ had become so widespread by the mid-1830s that Government policy in New South Wales towards the practice shifted from opposition to regulation and control. By that stage the term ‘squatter’ was applied to those who occupied Crown land under a lease or license, without the negative connotation of earlier times.
The term soon developed a class association, suggesting an elevated socio-economic status and entrepreneurial attitude. By 1840 squatters were recognized as being amongst the wealthiest men in the colony of New South Wales, many of them from upper and middle-class English and Scottish families. As unoccupied land with frontage to permanent water became more scarce, the acquisition of runs increasingly required larger capital outlays.
Eventually the term ‘squatter’ came to refer to a person of high social prestige who grazes livestock on a large scale (whether the station was held by leasehold or freehold title). In Australia the term is still used to describe large landowners, especially in rural areas with a history of pastoral occupation. Hence the term, Squattocracy, a play on aristocracy.