Why do some people say Sydney is the capital of Australia?
This is simply a misconception because Sydney is the largest city in Australia, and it was the first settlement here. It is the capital of New South Wales, and NSW was the original name for the entire eastern half of the Australian continent. Together with Melbourne (capital of Victoria), Sydney is a large centre for business, commerce, tourism – and it was because of this very rivalry that a completely new city was chosen to be the capital.