The territory of modern Wollongong was originally inhabited by the Aboriginal people of the Dharawal nation. It is believed that the city's name is derived from the word woolyungah, which means "five islands" in the indigenous language. The first Europeans, explorers George Bass and Matthew Flinders, visited the region in 1796. By 1815, the first European settlers arrived after indigenous guides led them and their cattle down the slopes of the escarpment.
The further development of Wollongong was inextricably linked to its rich natural resources. Coal mining played a key role in the city's formation, with the first mentions of deposits dating back to 1797. By the end of the 19th century, Wollongong had become the second-largest coal producer in the Australian colonies, which attracted heavy industry to the region. In 1875, the first coke ovens were built, and the launch of the steelworks in neighbouring Port Kembla in 1928 finally cemented Wollongong's status as a major industrial centre. To transport products, a horse-drawn tramway was built in 1861, which was replaced by steam locomotives in 1880. The completion of the railway line to Sydney in 1887 further strengthened economic ties and contributed to the city's growth.
In the mid-19th century, Wollongong began to acquire the features of a fully-fledged town. By 1856, its population stood at 864 people. During this period, important public buildings were constructed, including the Court House (1858), the first Town Hall (1886), and a hospital. The economy, initially focused on agriculture and timber, quickly shifted to coal mining and coke production. The appearance of gas lighting in 1883 and the development of transport infrastructure signaled Wollongong's transformation into a significant regional centre with an industrial specialisation.