You own your home, so why do you need planning permits and permission to make certain changes or do certain activities inside? Certainly, if you wanted to create a roller disco in your home, you'd need permission, but why do home businesses and some renovations require permission from a town council? What you choose to do with the interior of your home actually can have a major effect on your neighbours, even if you don't think it's a big deal. The town wants to be sure that what you want to do isn't going to create more problems.
Business Noise and Space
If you're planning to open a business that you'll operate from home, the town wants to know what you're doing because your business could end up making the neighbourhood too noisy or messy. For example, if you plan to have a home bakery where people pick up orders, you'll be creating excess traffic, possibly causing a parking problem, and possibly creating a fire hazard if your kitchen isn't up to the task. If you plan to work as a plumbing contractor, noise and traffic might not be an issue, but you may have to make sure your ute or van is parked in a garage if your neighbourhood has rules about business logos in residential areas. Of course, some businesses don't really create issues, such as a graphic designer who simply works at home.
Structural Strength
If you want to renovate the inside of your home, you have to be sure that the work will not bother neighbours, create pollution, or destroy the structural integrity of your house. You may need separate planning permissions and building permits in this case. Renovations are noisy, of course, but you need to limit when the noise occurs. You also have to limit the trash and dust that end up on others' property. The town can evaluate your plans and see if they're doable.
Neighbourhood Peace
What if you have a good-sized piece of property and a large house that you'd like to turn into a bed and breakfast, with plenty of space between you and your neighbours? Again, it's a matter of keeping neighbourhood peace. A bed and breakfast that doesn't require any major renovations, that provides enough off-street parking, and that has extensive guest rules regarding quiet times and behaviour could be permitted in some areas. But a short-term holiday house that allows a quiet neighbourhood to become party central is something the town would want to know about — and possibly stop.
Planning application procedures have changed in some towns because of the pandemic. You may have to submit forms online or have online conferences instead of showing up in person. Check your town's website or speak with contractors who can help you navigate the complexities of town planning.