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Depends on your point of view. If you're one of those being dispossessed, then obviously it's wrong. If you're one of those who are benefitting from it, then obviously it's right!
Not if the country is subject to the rule of law, and the dispossession is found to be unlawful, as happened here at first. When the case was first heard in the High Court, the Government was found to be acting unlawfully. It then invoked the Royal Perogative, and the appeal cases turned on whether the Government was right to do so. In the Court of Appeal, the Government claimed that the Royal Perogative was immune from judicial scrutiny; the appeal judges disagreed and ordered the Government to return the archipelago to the Chagossians. The Government asked the House of Lords to rule on this (don't be misled: when the H of L sits as a court, the "Law Lords" hearing the case are senior judges, not aristocrats or politicians - and none of them had a direct material interest in the outcome). They held that it did have that right, but two of the five law lords dissented. In other words, the decision was carried on just one vote.