 For about 50 @,@ 000 years before the first British settlement in the late 18th century , Australia was inhabited by indigenous Australians , who spoke languages grouped into roughly 250 language groups . After the European discovery of the continent by Dutch explorers in 1606 , Australia 's eastern half was claimed by Great Britain in 1770 and initially settled through penal transportation to the colony of New South Wales from 26 January 1788 . The population grew steadily in subsequent decades ; the continent was explored and an additional five self @-@ governing crown colonies were established . On 1 January 1901 , the six colonies federated , forming the Commonwealth of Australia . Since federation , Australia has maintained a stable liberal democratic political system that functions as a federal parliamentary constitutional monarchy comprising six states and several territories . The population of 24 million is highly urbanised and heavily concentrated in the eastern states and on the coast . 
