Although ubiquitous internet-connected devices can bring huge environmental, public safety and health benefits, without safeguards the threats they could pose to personal freedom are huge, he said at a Local Digital Futures event this week.
"Could we be moving to a Maoist style state, but where instead of your neighbours reporting on you, it would be your devices" Creese said.
Governments could start to punish citizens for small discretions like overstaying in a parking space for a minute or speeding by one mile per hour thanks to data picked up by sensors, he suggested.
"Within our homes, our fridges could tell us when we need more milk and our washing machines could tell us when we need to put on a wash," Creese said.
"Something in that is taking away our freedom to think and act," he added.
Cisco has predicted the number of machine-to-machine devices will soar from 15 billion now to 50 billion by 2020.
However "amid all the enthusiasm about the Internet of Things, we should bear in the risks to civil liberty and freedom in mind", Creese said.
He suggested that without legal protections, we may have to pay companies to protect our privacy in future.
"Some may be unable to pay. Those with less money might be less insurable, more expensive to insure or might not get the public services they need as they do not conform to what we expect," he warned.
Creese said there were already "scare stories" in the media about intrusive devices, for example reports earlier this year that Samsung's collects and shares Smart TV voice recognition data with a third party.
He suggested a number of safeguards to help protect individual privacy,
Firstly governments should enshrine in law citizens' rights to decide how and when information is gathered on them, their right to know what data is collected, how it's used, how long it's held for and to correct or challenge it if it's wrong, Creese argued.
Secondly the government should be more transparent and open about how they use and reuse citizens' data within public services if they want people not to "opt out" of sharing data, he said.
Finally, Internet of Things vendors should work together to give individuals' visibility over which devices track them and give them the ability to switch them off permanently or temporarily, he added.
"I don't want to whip up a fear of technology when it offers so much good for us and the planet as a whole. But we must understand and deal with the risks if we are to keep our own individual and community freedoms," he said.
Creese was appointed president of BCS, the Chartered Institute for IT, in March. He was previously CIO at Hampshire County Council.