Squatters weren't actually landlords. They were (still are, although I don't know if they are called squatters much nowadays) the big landowners in the Outback, grazing their stock over many thousands of acres. In the USA they would be called ranchers. Originally a lot of them didn't have legal title to the land but simply claimed it and "squatted" on it.

In the harsh conditions of the Outback, these big graziers often resented the Selectors, or Free selectors (another term you will come across in Australian folksong.) These men selected and bought small plots of Crown Land up for offers and set up as small-time graziers raising sheep and cattle. But there was competition for grass and water, and the squatters would often give their smaller neighbours a hard time over such things as water rights, or stock straying through broken fences.