From the UFO capital of Australia to cheeky tourism campaigns (C U in the NT, anyone?), the Northern Territory has well and truly earned its place as the south’s quirky cousin.

But despite its independent spirit, the NT was once part of South Australia before being administered by the Federal Government, and has never been fully free to make binding laws for its people.

In true Territory style, it is a tale that begins with crocodiles and failed investments.

This investigation is part of Curious Darwin, our new series where you ask us the questions, vote for your favourite, and we investigate. You can submit your question or vote on our next topic here.

As the NT prepares to mark 40 years of self-government, we rifled through its weird and wacky history to see if we could get to the bottom of the question that has periodically cropped up: Why isn’t the NT a state?

What’s the difference between a territory and state?

Self-governing territories operate almost identically to states — they’re granted the power to form a parliament and to make their own laws.

However, while state laws are enshrined and protected by the constitution, territories are limited by the power granted to them by the Commonwealth, so any law made by the NT Government can be federally overridden.

This played out most prominently when the NT passed the first Australian law to legalise medically assisted euthanasia in 1995, which was nullified in 1997 by the Commonwealth.

“The federal parliament should not be able to require a change in the law of the NT because it does not like what the Territory government had done,” NT politician John Bailey said at the time.

“[NT Senator] Bob Collins said a number of times that he would rather have the worst possible government in the NT — and we have that — than be governed by Canberra.”

From nameless entity, SA cash cow, and then break-up

The harshness of the Territory’s climate and its remoteness for many years hindered its path to self-governance; see: the three attempts to colonise northern Australia post-European settlement, which ended with starvation, illness, and failure.

It was not until 1863 that the NT had its first breakthrough, according to Ken Parish, former NT Labor politician and senior law lecturer at Charles Darwin University (CDU).

“[South Australia] really, really wanted us, because the Overland Telegraph was about to be built and they thought they could take control of that as SA’s road to glory,” Mr Parish said.

Land was formally annexed from what had previously been a nameless part of NSW as the Northern Territory of South Australia, and it was ensured that NT citizens had the same right to political representation as South Australians.

Land sales commenced on March 1, 1864, and investors from London and Adelaide swooped in, buying up hundreds of lots of land. It was supposed to be the opportunity of a lifetime, but just one-tenth of the land sold had actually been surveyed.

“[Adelaide was established] by sub-dividing the whole joint and selling it to upper-aspirational Englishmen,” Mr Parish said.

“They tried the same scam with Darwin, and what people discovered was it was hot, dry, arid, and had lots of crocodiles.”

Investors turned tail; the expedition was recalled at the end of 1865, and disgruntled buyers sued the SA government for fraudulently inducing them into buying land, Mr Parish said.

Litigation continued for almost a decade and cost the SA government more than £73,000 in compensation, equivalent to around £8 million ($14 million) today.

Despite various government initiatives to develop the region, at the turn of the century the population stood at just 3,894 (Aboriginal Australians were not included in the survey), and the state was incurring further financial losses.

SA’s pot of gold had quickly turned into a bottomless pit.

Originally Published by ABC News, continue reading here.