Complex sentence: Henry II ordered that all royal castles be returned to the Crown, and he also had a policy of destroying most of the castles built without royal permission--the so-called "Adulterine Castles"--that had appeared during Stephen's chaotic reign.
Split into simpler sentences: Henry II ordered that all royal castles be returned to the Crown. He had a policy of destroying adulterine castles, built without royal permission, during Stephen's chaotic reign.