Jono - you ask "Who has the right to tell you what you can and can't do with your property?"
A: The government, who create laws that are designed to protect us all and protect the environment too.
"If you were using it in a criminal way, i.e. putting others at risk of harm, then yes of course there are sound grounds to intervene".
So if the planning authority says "this land has an authorised industrial use and must not otherwise be used for occupation" then putting caravans on it and living there as a permanent residence would be illegal, wouldn't it?
"Removing the 'illegal dwellings' means that those who were living in those dwellings will have to find somewhere else to live".
Absolutely - they need to find a legal site to pitch up on, or rent/buy a legal home somewhere, as the vast majority of people do.
"It amounts to the same thing doesn't it?"
What amounts to the same as what? I don't understand your question.