History of Sydney
With the inauguration of the Commonwealth of Australia on 1 January 1901, Sydney ceased to be a colonial capital and became the capital of the Australian state of New South Wales. With industrialisation, Sydney expanded rapidly, and by the early 20th century it had a population well in excess of one million.
Governor of New South Wales
Between 1850 and 1861, the governor of New South Wales was titled governor-general, in an early attempt at federalism imposed by Earl Grey. All communication between the Australian colonies and the British Government was meant to go through the governor-general, and the other colonies had lieutenant-governors. As South Australia (1836), Tasmania (January 1855) and Victoria (May 1855) obtained responsible government, their lieutenant-governors were replaced by governors. Although he had ceased acting as a governor-general, Sir William Denison retained the title until his retirement in 1861.
The six British colonies in Australia joined together to form the Commonwealth of Australia in 1901. New South Wales and the other colonies became states in the federal system under the Constitution of Australia. In 1902, the "New South Wales Constitution Act" 1902 confirmed the modern system of government of New South Wales as a state, including defining the role of the governor as the monarch's representative, who acts by and with the advice of the Executive Council. Like the new federal Governor-General and the other state governors, in the first years after federation, the governor of New South Wales continued to act both as a constitutional head of the state, and as a liaison between the government and the imperial government in London. However, the British government's involvement in Australian affairs gradually reduced in the next few years.
In 1942, the Commonwealth of Australia passed the "Statute of Westminster Adoption Act 1942", which rendered Australia dominion status under the Statute of Westminster, and while Australia and Britain share the same person as monarch, that person acts in a distinct capacity when acting as the monarch of each dominion. The convention that the monarch acts in respect of Australian affairs on the advice of his or her Australian ministers, rather than his or her British ministers, became enshrined in law. For New South Wales however, because the Statute of Westminster did not disturb the constitutional arrangements of the Australian states, the governor remains (at least formally) in New South Wales the representative of the British monarch. This arrangement seemed incongruous with the Commonwealth of Australia's independent dominion status conferred by the Statute of Westminster, and with the federal structure. After much negotiation between the federal and state governments of Australia, the British government and Buckingham Palace, the "Australia Act 1986" removed any remaining constitutional roles of the British monarch and British government in the Australian states, and established that the governor of New South Wales (along with the other state governors) was the direct, personal representative of the Australian monarch, and not the British monarch or the British government, nor the Governor-General of Australia or the Australian federal government.