New South Wales (NSW), Australia's most populous state, is located in the south-east of the country and encompasses the whole of the Australian Capital Territory. The colony of New South Wales was founded in 1788 and originally comprised much of the Australian mainland, as well as Van Diemen's Land, Lord Howe Island and Norfolk Island in addition to the area currently referred to as the state of New South Wales, which was formed during Federation in 1901.
Inhabitants of New South Wales are referred to as New South Welsh or New South Welshmen. New South Wales's largest city and capital is Sydney. (source)Thank you Myella!