The Colony of New South Wales was established in 1788 as the first British colony in Australia. It was founded primarily as a penal settlement, where convicts were sent from Britain. The colony's capital, Sydney, quickly grew into a major port and urban center, attracting free settlers and immigrants over time. The colony expanded its territory, eventually covering much of the eastern part of Australia. It played a significant role in the development of the nation, contributing to agriculture, trade, and exploration. In 1901, New South Wales became a state in the newly formed Commonwealth of Australia.