A constitution sets out the fundamental principles according to which something will be governed. New South Wales is subject to both the Australian (or Commonwealth) Constitution and the New South Wales Constitution. 

The Commonwealth Constitution adopted in 1901 provides the framework through which the Commonwealth of Australia is governed and relations with the states and territories operate. The Constitution sets out the broad powers and rules under which the houses of parliament, the Head of State, executive government, judiciary, and government agencies operate.

The Commonwealth Constitution can only be changed if the proposed change is approved by the parliament and then by a majority of voters in a majority of states, and by a majority of voters across the nation, in a referendum.

The New South Wales Constitution, adopted in 1902, serves a similar purpose at state level.  Certain parts of the constitution can only be amended by the people of New South Wales at a referendum, but other parts can be amended by the New South Wales Parliament like any other normal Act.