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On 1 January 1901, federation of the Colonies was completed after a 10 year gestation period, and the Commonwealth of Australia was born, as a dominion of the British Empire. The Australian Capital Territory was separated from New South Wales in 1911, to provide a neutral place for the proposed new federal capital of Canberra (the initial capital having been Melbourne). Although Australia had become independent, the British government retained some powers over Australia until the Statute of Westminster in 1931, and the theoretical authority of the British Parliament over individual states was not completely severed until the passing of the Australia Act in 1986. The original constitution gave the federal government power to make laws relating to any race of people except Aborigines. In 1967, a referendum supported by more than ninety per cent of voters gave the federal government the right to enact laws to protect Aboriginal people and to count them in the census.

English is the main official and spoken language in Australia, although some of the surviving Aboriginal communities maintain their native languages. A considerable number of first and sometimes second-generation migrants are bilingual; languages such as Italian, Cantonese and Greek are spoken in many communities.

While having a large and vibrant arts and cultural life (notably including the yearly Melbourne International Comedy Festival and Melbourne International Film Festival), Melbourne is perhaps best known as one of the most sports-obsessed cities in the world.

Debate about the role of the ABC continues, as many assign it a marginal role, and claim that American-influenced commercial TV and radio stations are far more popular choices. These critics claim that Australian children grow up watching Sesame Street and The Simpsons, eating fries at McDonalds, wearing baseball caps, speaking American slang, and some have never heard of Blinky Bill or the Magic Pudding. Television ratings are cited as backing this view, but it is less clear that these ratings tell the whole view. Certainly there have been many local television shows that have been successful, such as Skippy (in the late 1960s), Number 96 and The Box in the 1970s, Prisoner in the 1980s, and Neighbours and Home and Away (in the 1980s and 1990s), which have sometimes been even more successful abroad.

Australia has produced a wide variety of popular music. While many musicians and bands (some notable examples include the 1960s successes of The Easybeats and the folk-pop group The Seekers, through the heavy rock of AC/DC, and the slick pop of INXS and more recently Savage Garden) have had considerable international success, there remains some debate over whether Australian popular music really has a distinctive sound. Perhaps the most striking common feature of Australian music, like many other Australian art forms, is the dry, often self-deprecating humor evident in the lyrics.

The sharing of animal and plant species between adjacent parts of Australia, Papua New Guinea, and Papua and nearby Indonesian islands point to early land bridges closed when sea levels rose. The historically traditional movement of people between these places in primitive sailing craft for trade and fishing, point to the possibility of Arab and Chinese traders to the northern islands learning of and then visiting the shores of the southern continent from as early as the 9th century. Maps compiled in Europe from the late 1400s show parts of the coastline.

Adelaide is often referred to as the 'City Of Churches', although this is a reflection more on Adelaide's past than its present. Rumour has it that for every church that was built in Adelaide, a public house was also built to serve the less pious.

Australia is about 31.5 times bigger than the United Kingdom.

Australia's population has more than doubled since the end of World War II, spurred by an ambitious postwar immigration program. In the 19th century, Australia enacted strong measures to prevent immigration by nonwhites. After World War II, immigration from Greece, Turkey, Italy, and other countries increased Australia's cultural diversity. In 1973, Australia officially ended discriminatory immigration policies, and substantial Asian immigration followed. By 1988 about 40% of immigration to Australia was from Asia, and by 1997 Asians constituted about 5% of the population. The indigenous population, the Australian Aborigines and Torres Strait Islanders, make up 2.2% of the population, according to the 2001 Census. In 2001, the political campaign was dominated by issues of immigration and national security and there still remains substantial anxiety among Australians concerning immigration.

Many raw materials (including resources postulated to exist but yet to be discovered) remain mostly unexploited. Australia is often referred to by economists as the "world's farm", but despite this emphasis on the agriculture sector, in recent years the Australian government has been focusing on the tourism, education and technology markets.