Australia has six states—New South Wales, Queensland, South Australia, Tasmania, Victoria, and Western Australia—and two major mainland territories—the Northern Territory and the Australian Capital Territory (ACT). In most respects these two territories function as states, but the Commonwealth Parliament can override any legislation of their parliaments. By contrast, federal legislation only overrides state legislation in certain areas that are set out in Section 51 of the Australian Constitution; state parliaments retain all residual legislative powers, including powers over education, police, the judiciary, roads, public transport, and local government as these do not fall under the provisions listed in Section 51.

Each state and major mainland territory has its own legislature or parliament: unicameral in the Northern Territory, the ACT, and Queensland, and bicameral in the remaining states. The states are sovereign, though subject to certain powers of the Commonwealth as defined by the Constitution. The lower house is known as the Legislative Assembly (House of Assembly in South Australia and Tasmania) and the upper house is known as the Legislative Council. The head of the government in each state is the Premier, and in each territory the Chief Minister. The Queen is represented in each state by a Governor; and in the Northern Territory, the Administrator.[87] In the Commonwealth, the Queen's representative is the Governor-General.

The federal government directly administers the following territories:

Jervis Bay Territory, a naval base and sea port for the national capital in land that was formerly part of New South Wales
Christmas Island and Cocos (Keeling) Islands
Ashmore and Cartier Islands
Coral Sea Islands
Heard Island and McDonald Islands
Australian Antarctic Territory
Norfolk Island is also technically an external territory; however, under the Norfolk Island Act 1979 it has been granted more autonomy and is governed locally by its own legislative assembly. The Queen is represented by an Administrator, currently Owen Walsh.