A federation is a group of countries or regions that have joined together to form a larger government or system. The federation of Australia involved a system of government with a written constitution that divides responsibility and decision-making power between a national government and state governments.

Australia became a Federation on 1 January 1901 when the six separate British colonies – New South Wales, Victoria, Tasmania, South Australia, Queensland, and Western Australia united and created the Australian Constitution which established the Commonwealth of Australia. The six colonies became States with their own constitutions and parliaments. The new Federal parliament would make laws for the whole nation on the issues not governed by the states. For example: defence, trade, immigration and currency.  The Northern Territory and the Australian Capital Territory (ACT) were not part of the original Federation in 1901. They were created as federal territories in 1911.