New South Wales (abbreviated as NSW), Australia's most populous state, is located in the south-east of the country, north of Victoria, south of Queensland, east of South Australia and encompasses the whole of the Australian Capital Territory. It was founded in 1788 and originally comprised much of the Australian mainland, as well as Van Diemen's Land, Lord Howe Island and Norfolk Island.

When Britain annexed New Zealand in 1840, it briefly became a part of New South Wales. During the 19th century large areas were successively separated to form the British colonies of Tasmania (established as a separate colony named Van Diemen's Land in 1825), South Australia (1836), Victoria (1851) and Queensland (1859).

Inhabitants of New South Wales are referred to as New South Welsh or New South Welshmen. New South Wales's largest city and capital is Sydney.

The original inhabitants of the area were Aboriginal tribes who arrived in Australia approximately forty to sixty thousand years ago.

The European discovery of New South Wales was made by Captain James Cook during his voyage along the east coast of Australia in 1770.

In the journal covering his survey of the eastern coast of the Australian continent, Cook first named the east coast of Australia "New Wales", which he later corrected in his journal to "New South Wales".

The first British settlement was made by what is known in Australian history as the First Fleet led by Captain Arthur Phillip who assumed the role of governor of the settlement on arrival in 1788 until 1792. During this time New South Wales was an entirely penal colony.

After years of chaos, anarchy and the overthrow of Governor William Bligh, a new governor, Lieutenant-colonel (later Major-General) Lachlan Macquarie, was sent from Britain to reform the settlement in 1809. During his time as governor, Macquarie commissioned the construction of roads, wharves, churches and public buildings, sent explorers across the continent and employed a planner to design the street layout of Sydney. Macquarie's legacy is still evident today.

During the 19th century, large areas were successively separated to form the British colonies of Tasmania (proclaimed as separate colony named Van Diemen's Land in 1825), South Australia (1836), New Zealand (1841), Victoria (1851) and Queensland (1859). Responsible government was granted to the New South Wales colony in 1855.

At the end of the 19th century, the movement toward federation between the Australian colonies gathered momentum. Conventions and forums involving colony leaders were held on a regular basis. Proponents of NSW as a free trade state were in dispute with the other leading colony Victoria, which had a protectionist economy. At this time customs posts were common on borders, even on the Murray River.