Not only can certain species of caterpillars communicate, but research reveals that they evolved from creatures that once had legs. According to an article in BBCNews.com, the creature uses "hair-like structures ... to make sound ... to communicate its ownership of a leaf." This discovery indicates the caterpillar can tell intruders to step back without conflict.
The article quotes lead researcher Dr. Jayne Yack of Carleton University in Ottawa, who says the caterpillars use their hind quarters to make vibratory sounds with the hair-like structures on their bodies. The resulting scraping sound tells any nearby creature that a particular leaf is spoken for. Scientists have observed the caterpillars responding to the communications, actually leaving the leaf in question when confronted by the owner.
The BBC quotes Yack, saying the masked birch species branched off from an earlier species that didn't communicate in this way, but instead had legs to walk toward an intruder, threatening to attack. Yack says the communication with scraping sounds is a nonviolent way for the caterpillars to resolve conflict. The article mentions that this evolutionary pacifism sheds an interesting light on "civilized" conflict resolution — an area of exploration for scientists focused on other species.