Local government is the third-level of government in Australia, administered with limited autonomy under the states and territories, and in turn beneath the federal government. Local government is not mentioned in the Constitution of Australia, and two referendums in 1974 and 1988 to alter the Constitution relating to local government were unsuccessful. Every state/territory government recognises local government in its own respective constitution. Unlike the two-tier local government system in Canada or the United States, there is only one tier of local government in each Australian state/territory, with no distinction between counties and cities.

Shire is a traditional term for an administrative division of land in Great Britain and some other English-speaking countries such as Australia and the United States. It is generally synonymous with county. It was first used in Wessex from the beginning of Anglo-Saxon settlement, and spread to most of the rest of England in the tenth century. In some rural parts of Australia, a shire is a local government area; however, in Australia, it is not synonymous with a "county", which is a lands administrative division.