In the colonisation of the Australian interior during the Nineteenth century, the largest and wealthiest stations were establish by well-capitalised graziers who simply went out into the hinterland and seized large tracts of the best grazing land. Lacking formal tenure of what was legally Crown land (and which they had effectually conquered by private war) these wealthy land-owners were called “squatters”. They were contrasted with “selectors”, who had taken up limited tracts in accordance with colonial law, though in many cases squatters secured title to critical resources such as water by selecting or getting their dependants to select critical areas “picking the eyes out of the country”, leaving the rest useless to other selectors.
The squatters became wealthy gentry (many of them started out as younger sons of English and Scottish wealthy families), and in the political development of New South Wales made an attempt to ensconce themselves as a “bunyip aristocracy”. That failed; nevertheless squatters up until about WWI ran the interiors of Victoria, New South Wales, South Australia, and Queensland as an informal but effective squirearchy derided by critics as “the squattocracy”. Some squatter families are still prominent, and connected with the British aristocracy.
So in Australia until, say, the 1970s “squatter” meant something like “rancher” and something like “squire”. The term is archaic now.