The centenary of Australia's Federation is about remembering how things used to be. Equally, it is about honoring a century of spectacular change and growth. The festivities 100 years ago were full of elation and, for those who had worked decades to weld the nation together, relief. But there were also fervent expectations about what the fledgling nation could become. On Jan. 1, 1901, Australia's oldest newspaper, the Sydney Morning Herald, said that seldom in the history of the world had "a people entered into full possession of their heritage under circumstances so auspicious and with an outlook so full of dazzling promise." This week's celebrations will be less expectant than congratulatory. But this might also be the moment to wonder what this nation, inaugurated in an elaborate ceremony in Sydney's Centennial Park, has become.

To look at modern Australia through the eyes of a community like Townsville is to learn more about the nation than its largest cities, shifting with global tides, can tell. Places like Townsville are still Australian towns, big enough to matter yet small enough to reveal the way the country has changed. The children of Hermit Park are growing up in a town central to the story of Australia's flag. It was here, 1,370 km north of Brisbane, on Sept. 16, 1901, that the flag of the new nation was first officially raised by the Governor General, Lord Hopetoun. Townsville has experienced at first hand much of what shaped the nation in the years since that historic day: the isolation; the merciless climate with its droughts and cyclones; the struggles and triumphs of miners and farmers; the mixing of people from all over the world; the social and economic upheaval that has both defined and threatened Australia's idea of itself and its future.

Townsville was a 37-year-old river port, a small and remote outpost, when Australia's six colonies came together in Federation. In the past century it has exploded, with new suburbs and shopping centers where apple orchards and meatworks once stood. Now, the conurbation of Townsville and adjoining Thuringowa has a population approaching 130,000. It's Queensland's largest urban center outside Brisbane, a major defense base, a public administration center, and home to several world-class research institutes. It is often called "Mount Isa by the Sea," mainly because, like the mining town in far west Queensland, this dry, tropical town has always been primarily working-class, fed by its railways and its port, by work in the sugar mills and the mines, a symbol of Australia's ties throughout the past century to the land and its riches.

Federation brought great visions of a country built on those rural and mineral resources. "We have within our borders," proclaimed the Herald in 1901, "all the material guarantees for prosperity and greatness." The onrush of globalization has shaken such certainties. The roads are still long, and there isn't a major town for 100 km, but Townsville is no longer isolated. And though it has always sent its produce overseas, exporting sugar, beef and minerals since the 1860s, its reliance on the world's appetites is greater than ever.

The focus is "on the north, not the south," says Richard Power, ceo of Townsville Enterprise. "That's where our trade is and where our future lies." Papua New Guinea, Indonesia and Korea are big customers. Borders have been leaped with projects like the Sun Metals zinc refinery, which has just opened on the town's outskirts with Korean staff, 100 local trainees and an American ceo, and which hopes to sell around $A300 million worth of zinc a year. With new industries like tourism and biotechnology come possibilities unheard-of a generation ago: Brent Robino's family have been cane farmers near Ingham, north of Townsville, since the 1930s, but instead of following them he is studying aquaculture at Townsville's Australian Institute of Marine Science. "It's a growing industry," he says, "so I knew I'd find a job when I finished."