Australia (play /əˈstreɪljə/), officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania and numerous smaller islands in the Indian and Pacific Oceans.N4 Neighbouring countries include Indonesia, East Timor and Papua New Guinea to the north, the Solomon Islands, Vanuatu and New Caledonia to the northeast and New Zealand to the southeast. For at least 40,000 years before European settlement in the late 18th century, Australia was inhabited by indigenous Australians,[8] who belonged to one or more of roughly 250 language groups.[9][10] After discovery by Dutch explorers in 1606, Australia's eastern half was claimed by Britain in 1770 and initially settled through penal transportation to the colony of New South Wales, formally founded on 7 February 1788[11] (although formal possession of the land had occurred on 26 January 1788). The population grew steadily in subsequent decades; the continent was explored and an additional five self-governing Crown Colonies were established. On 1 January 1901, the six colonies became a federation and the Commonwealth of Australia was formed. Since Federation, Australia has maintained a stable liberal democratic political system and is a Commonwealth realm. The population is 22 million, with approximately 60% concentrated in and around the mainland state capitals of Sydney, Melbourne, Brisbane, Perth and Adelaide. The nation's capital city is Canberra, in the Australian Capital Territory.