Use of land refers to using land for a particular purpose (such as a dwelling or a shop) and may not involve building anything. Development includes the construction, alteration or demolition of a building or works and the subdivision or consolidation of land.
In some zones, the development of land and the proposed new use both require a permit. For example, in the Mixed Use Zone, a permit is required to construct a building and to use a building for an office. In other zones, the use may not require a permit, but a permit may be required to construct the building (the development) for the use. In this situation, council can only consider the effects of the new building (such as height, visual bulk and so on) and not the change in the use of the land.
Source: Planning: A Short Guide by the State of Victoria