The Australian States and territories are key components of the federal system of government established in 1901. The Australian people drew on their constitutional heritage to join in a federation under the Commonwealth Constitution, and thereby give birth to the Commonwealth of Australia. In transforming their colonies into States, they created two levels of representative government by granting specific powers to the Commonwealth and by retaining for themselves residual power. All of this occurred pursuant to the Commonwealth of Australia Constitution Act 1900 (Imp). From the beginning the colonies' progeny, the Commonwealth, was given ascendency over the States to the extent that s 106 subjects their Constitutions to the Commonwealth Constitution, and s 109 overrides their laws so far as they are inconsistent with Commonwealth law. Moreover, since federation, the States have battled to maintain their autonomy in the face of increasing Commonwealth power and financial influence. It is a battle they have substantially lost. Consequently, at the beginning of the second century of federation, the future role of the States in the federation needs to be redefined.

As for the Commonwealth's territories, they are entirely creatures of the Commonwealth. There is considerable homogeneity between the constitutional systems of the six Australian States, but more divergence is evident in relation to the Commonwealth's territories. Three territories have been conferred distinctly different forms of self-government: the Northern Territory in 1978; Norfolk Island in 1979; and the Australian Capital Territory in 1988.