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There are eight 'capital cities in Australia', all of which function at a sub-national level. One of them, namely Canberra has also acted as the federal capital since 1927. Between 1901 and the current national capital's opening, Melbourne functioned as the seat of national government.
In each capital city, local judicial, administrative and legislative duties are performed for the jurisdiction. In the case of state and territory capital cities, they also happen to be the most populous city in their respective jurisdiction:

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2. The Statistical District which encompasses Canberra also includes the neighbouring city of Queanbeyan, New South Wales.