The area formed the traditional lands associated with the Ngambri People and several other linguistic groups, an association known through both early European settler accounts and the oral histories of the peoples themselves.Following the colonisation of Australia by the British, the 19th century saw the initial European exploration and settlement of the area and their encounters with the local indigenous peoples, beginning with the first explorations in 1820 and shortly followed by the first European settlements in 1824.At the outset the region was dominated by large properties used for sheep and cattle grazing, which had been granted to free settlers that had arrived in Australia from the United Kingdom and other European countries.These large properties were later broken up and subdivided in accordance with changes to land tenure arrangements, smaller farms and urban developments becoming more common.The area has a long history of human occupation; ruins of a medieval monastery and "Blakeney Chapel" (probably a domestic dwelling) are buried in the marshes.The towns sheltered by the shingle spit were once important harbours, but land reclamation schemes starting in the 17th century resulted in the silting up of the river channels.
The region has a long prior history of human habitation before the Territory's creation, with evidence of Indigenous Australian settlement dating back at least 20,000 years.
In 1908, the region was selected as the site of the nation's future capital city.
In 1909, New South Wales formally ceded to the federal government the territory and additional land at Jervis Bay for the establishment of a sea port for the capital.
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