It was a partial reversal of the Cromwellian Act for the Settlement of Ireland 1652, which punished Irish Catholics and Royalists for fighting against the Parliamentarians in the Wars of the Three Kingdoms by the wholesale confiscation of their lands and property.

When the Rump Parliament in London passed the Act of Settlement 1652 after the Cromwellian conquest of Ireland, its purpose was two-fold.

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 resistance to the Parliamentarians.

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.

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 Puritan settlers (who were later to be known as Dissenters).

On the Irish Restoration of the Monarchy, those (notably the Duke of Ormonde) who had taken the Royalist side pleaded with the King for the injustices to be undone.

Accordingly, the Parliament of Ireland (in Dublin) passed a new Act of Settlement 1662 which ordered that the Cromwellian settlers give up a portion of their allotted land to "Old English" and "innocent Catholics", as would be determined by Commissioners.

[1] A further complication arose as the buyers of confiscated land in 1652–59 were third parties who expected that their purchases for cash were legal and were protected by privity of contract.

The Act of Explanation stated that Cromwellian settlers (with some named exceptions) had to give up one-third of the lands they had received after 1652 to compensate innocent Catholics.

Many Protestants in Ireland felt that the Restoration Settlements were far too lenient towards those Irish Catholics who had rebelled against the sovereignty of King Charles in 1641 and had been justly punished for it by the loss of their property and power.