In order to allow "Connecticut" to "rival" or "compete with" Massachusetts, the king had to keep it out of Massachusetts.
The reason was that several bands of refugees had left what we now know as Massachusetts (mainly Boston), and wandered to and settled parts of what we now know as Connecticut. These included enclaves of the Connecticut colony around the present-day capital of Hartford, Saybrook, and New Haven.
These were "squatter" settlements because they had been made without any authority. On the other hand, Massachusetts had been settled under the auspices of the Massachusetts Bay Company, which in turn derived its authority from the king.
In granting a royal charter to these three settlements under the heading of Connecticut, King Charles II 1) made these settlements "legitimate," confirming titles to the land, and 2) made them independent of Massachusetts. Otherwise, Massachusetts might some day claim that these settlements had been made by "its" citizens, and claim the lands for itself. Connecticut was now officially a separate colony, with (sea) borders ranging from the Naragansett Sound, to as far west as the sea would go, theoretically to the Pacific.
King Charles II had an incentive to do this because during the English Civil War, Massachusetts had been strongly in favor of the Puritans or Cromwellites. "The enemy of my enemy is my friend."