As first reported by The Express, the settled community in the Hovefields area of Wickford reported hardcore-laden lorries arrive at the weekend.
The lorries were followed by large mobile homes.
Basildon Council said it is aware of "an alleged breach of planning laws". Essex Police has also been informed.
The Hovefield site - which is subject to a High Court injunction preventing further development - is less than three miles (5km) by road - from the Dale Farm traveller site in Wickford.
Dale Farm was Europe's largest traveller site before about 80 families were evicted from unlawful plots in 2011.
Jill Walsh, of the Hovefields Residents Association, said an English Traveller family in five caravans left the site on Friday.
After they departed, she said, a number of large lorries carrying concrete, hardcore and three mobile homes drove down Hovefields Avenue and onto the five acre field at the end of the road.
Mrs Walsh said because of the narrowness of the road one of their neighbours - an elderly couple - had their fence ripped out and shrubbery damaged so that the lorries could get through.
"If the council does not prosecute over this and deal with the situation urgently they will have a Dale Farm II, but bigger."
Phil Turner, leader of Basildon Council, said: "Basildon Council is aware of an alleged breach of planning laws in the Hovefields area.
"We share the frustrations of residents, but the council does not have powers of arrest and must follow the proper legal process.
"As a public body, we must act within the existing legal framework, as set out by Parliament, and this adds considerable time and cost in dealing with such situations.
"However, residents can be assured that the council is taking all appropriate steps to deal with unauthorised development."
Essex Police said it was investigating a criminal damage report involving the fence and has urged any witnesses to contact them.
A police spokesman said: "Essex Police is aware of an unauthorised traveller development on land near Hovefields Avenue.
"We are liaising with the local authority and will continue to monitor the situation."

Smith, 34, lost WBO title bouts with Arthur Abraham in 2014 and 2015, and trainer Joe Gallagher said Saturday's fight was a "last roll of the dice".
The Briton has now been beaten seven times in his 45 professional fights.
The three judges in Wetzlar, Germany, each ruled the fight 119-108 in Zeuge's favour.
It was Zeuge's third defence since he won the WBA title from Italian Gioavanni de Carolis in November 2016.
In a largely one-sided contest, Smith was given a count by the referee in the closing seconds of the final round despite appearing to slip.
"Is it the end at world level for him? 100%. Is there another level he wants to compete at? That is one for Paul Smith," promoter Eddie Hearn said on Sky Sports.
"We talked about last-chance saloon before the fight, he left it much too late. I think he will be kicking himself for that.
"He had a good spell in the third round when he wobbled Zeuge, and he did in the 11th and 12th rounds too. We would have liked to see that earlier, but it's easy for us to say. Zeuge was very good and countered well."

There are 67 items in total, including a Dalek from 1966, and a Cyberman from the show's 19th series.
His rare props are expected to attract interest from people around the world, and could go for thousands of pounds.
His wife has said she might have to lock him in the shed to stop him from buying back his own favourites.
The auctioneer has said that the full collection of film memorabilia, including the Dr Who props, is the best he's ever seen.
"They are incredibly rare, to get a genuine Dalek from that period," he said.
"I've never seen one coming up for many, many, many years."
Residents have called for urgent action amid claims that a new mass Traveller site is being created at the end of their road in Essex.
[NEXT_CONCEPT]
Paul Smith lost a third attempt to win a world title as Tyron Zeuge retained his WBA world super-middleweight belt with a unanimous points decision.
[NEXT_CONCEPT]
A collector is putting his massive haul of film and TV props on sale, because his wife says there isn't space for them all in the house.