Caterpillars don't have pain receptors like humans and animals do so when they get stepped on or cut etc they do not feel any pain like humans and animals would feel.
However caterpillars can feel irritation when stepped on or cut or pressed on etc.
A caterpillars pain feeling is more irritation so they can sense being hurt but not in the same way humans do.
I wish we just felt irritation but I guess that having pain is better because we know that we're hurt more such as when touching something hot etc.
But I bet that a woman would rather feel irritation when giving birth to a baby instead of the intense pain that they go through.
And if you've ever been kicked or hurt your balls then that hurts bad as well and irritation would be a better feeling.