The islands became an Australian Territory from 23 November 1955 with the proclamation of the Cocos (Keeling) Island Act 1955. Prior to this time they had been administered as a British possession by the Colony of Singapore, and had from the middle of the nineteenth century been administered by British Governors in Ceylon or Singapore (the Straits Settlements).
Commercial activity on the islands commenced with a settlement formed in 1827 by Captain John Clunies-Ross who brought with him several boatloads of Malays to establish coconut plantations. Prior to this time the islands had been uninhabited. In 1886 Queen Victoria granted all land on the islands to George Clunies-Ross (a descendant of Captain Clunies-Ross) and his heirs in perpetuity.
The islands were strategically important to Australia in both world wars, as a communications and transport link across the Indian Ocean. In World War I the cable station on Direction Island was attacked by a party from the German cruiser Emden, which was subsequently sunk by HMAS Sydney off North Keeling Island. Similar installations were attacked by the Japanese during World War II. The Allied forces occupied the islands for most of the War, constructing an airstrip in 1944. From 1944 to 1946 the islands came under military administration.
From 1955 Australian administration of the territory was the responsibility of an Official Representative of the Australian Government. This arrangement was altered in 1977 with the appointment of an Administrator reporting to the Minister for Territories. A Cocos-Malay Local Government Council was created in 1979 and in 1984 the Islanders voted for full integration with Australia.In 1978 the Australian Government purchased from Mr John Clunies-Ross the remainder of his property on the islands with the exception of his house on Home Island.