The Australian Capital is CANBERRA, an 8-letter word. CANBERRA is the capital city of Australia and the largest inland city in the country. It is located in the Australian Capital Territory in the south-east of the country. The city was founded in 1913 as a compromise between Sydney and Melbourne, who were vying to become the nation's capital. CANBERRA is home to many national monuments and institutions, including Parliament House, the High Court of Australia, and the Australian War Memorial.