This grievance refers to the Proclamation of 1763; and the refusal of the British Parliament and King to reverse or modify it.
And We do further declare it to be Our Royal Will and Pleasure, for the present as aforesaid, to reserve under our Sovereignty, Protection, and Dominion, for the use of the said Indians, all the Lands and Territories not included within the Limits of Our said Three new Governments, or within the Limits of the Territory granted to the Hudson's Bay Company, as also all the Lands and Territories lying to the Westward of the Sources of the Rivers which fall into the Sea from the West and North West as aforesaid.
And We do hereby strictly forbid, on Pain of our Displeasure, all our loving Subjects from making any Purchases or Settlements whatever, or taking Possession of any of the Lands above reserved[,] without our especial leave and Licence for that Purpose first obtained.
And. We do further strictly enjoin and require all Persons whatever who have either wilfully or inadvertently seated themselves upon any Lands within the Countries above described. or upon any other Lands which, not having been ceded to or purchased by Us, are still reserved to the said Indians as aforesaid, forthwith to remove themselves from such Settlements.
From Wikipedia - Royal Proclamation of 1763
The proclamation declared all territory west of the Appalachians as an Indian Reserve, and forbade colonial expansion into it. That is the meaning of:
... other laws for the accommodation of large districts of people, ....
The colonists wished to expand into the territories west of the Appalachians (ie "all the Lands and Territories lying to the Westward of the Sources of the Rivers which fall into the Sea from the West and North West as aforesaid.")
The reference to "... unless those people would relinquish the right of representation in the legislature." probably refers to the phrasing above of
... without our especial leave and Licence for that Purpose first obtained ...
though I have not yet tracked this down definitively. The refusal to allow this land to be either part of an existing colony expansion, or part of a new colony, would quite suffice to match the grievance as phrased.