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Australia is a country located on Earth; it can also refer to the continent that the country of Australia is a part of, but other names commonly used to refer to the continent are Australasia and Oceania. This real world setting has received references in Mario media.
Australia appeared in an episode of The Adventures of Super Mario Bros. 3, "7 Continents for 7 Koopas". When Bowser tried to conquer the entire Real World, he ordered Cheatsy Koopa to capture Australia. Cheatsy used his magic wand to turn all of the humans into kangaroos, except for a Crocodile Dundee-type hunter, who was transformed into a prawn. Princess Toadstool eventually stole Cheatsy's wand, and restored everyone back to normal.