What is the difference between a state and a territory?
Australia's six states represent the six British colonies that joined together to create the Commonwealth of Australia. In forming the Commonwealth, the states approved a Constitution that gave the then new Commonwealth government the right to pass laws on certain subjects, and allowed the states to retain all other law-making rights. States therefore have a constitutional right to convene a state parliament and pass certain laws.
Any land within Australia's national border that is not claimed by one of the states is called a territory. Territories do not have the right to convene their own government or pass laws as the states do. Under the Constitution, the Australian Government makes the laws for the territories.
The confusion between state and territory arises because the Northern Territory and the Australian Capital Territory are often treated like states. These two territories, along with Norfolk Island, are self-governing territories. In these three cases, the then Commonwealth passed a law allowing each territory to convene a parliament and make their own laws in a similar manner to the states. Unlike the states, whose powers are defined through the Constitution, the powers of these territories are defined in Australian Government law which grants them the right of self-government. This also means that the Australian Government can alter or revoke these powers at will.
Under Section 121 of the Australian Constitution, territories can become states with the approval of the Parliament of Australia.