The Australian Capital Territory, known as the Federal Capital Territory until 1938, is a federal territory of Australia. Canberra, the capital city of Australia, is situated within the territory, and serves as the territory's primate city. It is located in southeastern Australian mainland as an enclave within the state of New South Wales. Founded after Federati…The Australian Capital Territory, known as the Federal Capital Territory until 1938, is a federal territory of Australia. Canberra, the capital city of Australia, is situated within the territory, and serves as the territory's primate city. It is located in southeastern Australian mainland as an enclave within the state of New South Wales. Founded after Federation as the seat of government for the new nation, the territory hosts the headquarters of all important institutions of the Australian Government, most notably Parliament House.