The English settled Australia on the basis of the 18th century concept of 'terra nullius' (land of no one). This stated that where land was uninhabited, the land could be regarded as belonging to no one and could be taken by a colonising power. That power could thus take and dispose of the land, and use its own law - in the case of Australia, English law - to control the new colony. In Australia the concept of terra nullius was expanded to include territory where there appeared to be no organised system of government or land ownership. As a result, there was no recognition of any form of indigenous property ownership existing at the time of settlement.

In June 1992 the High Court handed down its judgment in the landmark case of Mabo v The State of Queensland [No 2] (1992) 175 CLR 1; 107 ALR 1, dramatically changing our understanding of the law relating to Aboriginal people and the land. The court recognised that Aboriginal people had held a form of title to their land before English colonisation in 1788. The court rejected the expanded colonial doctrine of 'terra nullius', stating that it was not, and never had been, part of Australian law.

The High Court stated that native title to land could still exist provided that:

Native title is extinguished and cannot be revived wherever land is owned in fee simple (full ownership under registered title document). It is also extinguished on some Crown land, where land is being used for a specific purpose such as roads, public buildings, some national parks. Where the Crown has granted specific purpose leases or licences over land (e.g. grazing licences, timber permits etc.), native title may still exist but it cannot take away or interfere with the rights that people hold under those leases or licences – see the Wik Judgment and Pastoral Leases. The definition of 'native title rights and interests' is stated in the Native Title Act 1993 (Cth). It includes hunting, gathering and fishing rights.