How did the Northern Territory become a territory?

The Northern Territory is one of two mainland Australian territories, and not a state. At Federation, the Northern Territory did not yet exist. From 1825 to 1863, the Northern Territory was part of New South Wales, and from 1863 to 1911 it was part of South Australia. This resulted from the successful 1862 expedition of John McDouall Stuart to find an overland route through the desert from Adelaide to the north.

On 1 January 1911, the Northern Territory was separated from South Australia and transferred to Commonwealth control. The Northern Territory does not have the full rights that a state has, but the territory is administered by the Commonwealth delegating powers to the Northern Territory Legislative Assembly. States can govern their area in their own constitutional right. So, it is called a territory because it is an area of Australia controlled by Australia and is not an actual state.