A great cheer rang out when Lady Denman announced 100 years ago that the nation's new capital would be known by a hybrid of its local name and not Sydmeladperbrisho.

The crowds gathered, the politicians were solemn, the military bands played, a 21-gun salute thundered and the dogs hared about in the middle of Canberra - at that point, a city that existed only in imaginations.

Photos from the ceremonies to lay the capital's foundation stone and reveal its name show almost 5000 people gathered in the middle of bare paddocks.

But the hope, pride and aspirations present on that day - not to mention the rivalry between Sydney and Melbourne - ensured that in a hundred years Canberra would become a quietly bustling city.

Canberra marks its centenary in 2013, but discussions about the national capital began even before federation in 1901.

Rivalries between the colonies were so intense that a compromise provision had to be inserted in the Australian Constitution specifying the national capital territory would be located within NSW, but that parliament would sit in Melbourne until the new seat of government was ready.

After federation, there was a decade-long "battle of the sites" as people argued why their bit of NSW was the best location for the capital.

But on March 12, 1913, as then-Prime Minister Fisher put it, "the wrangle about the home of the government of Australia (was) over".

On that day Fisher, Governor-General Lord Thomas Denman and Home Affairs Minister King O'Malley laid foundation stones for the new capital and Lady Denman named the city.

The foundation stones now sit out the front of Parliament House, roughly 70 metres from their original location - after they had to be moved during the 1980s excavations for the building.

Unlike the city's design, there was never a competition to name the new capital.

But enterprising Australians wrote to the government with their suggestions anyway, including the idea the name should incorporate the first syllable of each state capital - hence Sydmeladperbrisho.

"Once they had clearly chosen 'Canberra', then it was a case of trying to find out what it meant and how it should be pronounced," centenary history and heritage adviser David Headon told AAP.

The politicians back then were frustrated because no one could tell them what it meant for sure, and also its pronunciation.

"The pollies involved, most of whom were housed in Melbourne, decided that however Lady Denman pronounced it on the day, that would be the formal pronunciation.

"That was the pragmatic solution and ... with her accent almost certainly saying 'Cahn-brah', that's what we got."

As to its meaning, Headon says his best research suggests Canberra is a merging of the English word Canberry (an adaptation of a British town's name) and the indigenous word for "meeting place", Kamberra.

"Whatever its origin, it has been so long in use locally that it may fairly be described as an Australian name," Lord Denman told the official luncheon after his wife had announced the name.

The locals certainly approved of the choice, with O'Malley's account of the day noting "the enthusiasm evoked by the announcement ... was long sustained".

The closest competitors to "Canberra" were "Shakespeare" - favoured by O'Malley - and "Myola".

"Fisher was never a great admirer of his minister, O'Malley," Headon said.

"I think his American ways were not super favourites of the PM, who was himself Scot by background so rather different in orientation.

"When it was pointed out to Fisher that Myola was very close to an anagram of O'Malley, he decided that wasn't on."

O'Malley had special golden trowels made to set the three foundation stones in place, along with a "golden casket" for Lady Denman to hold the paper with the official name.

The casket was made a perfect size to hold cigarettes because Lady Denman was a heavy smoker, unlike most of her peers.

She used it as her cigarette case for most of the rest of her life.

The casket's tale is just one of the many fascinating stories that inevitably accompany any large public event.

That day 100 years ago also included the awarding of medals to a pair of shark-rescue heroes from Sydney and a performance of Advance Australia (which didn't become the official national anthem until 1984).

Those tales were not the start of the capital's story, but the official ceremonies did mark the start of Canberra.

Whether the city in its first hundred years has lived up to the hopes and aspirations of those who imagined them may be debatable.

But Canberra remains a city for all Australians.

"It is always easy to sneer and criticise but ... it seems to me the duty of patriotic Australians to do all that lies in their power to make this capital worthy of the commonwealth," Lord Denman said a century ago.

"The city that is to be should have a splendid destiny before it but the making of that destiny lies in your hands, the hands of your children and those who come after them."

* The golden trowels, the cigarette case, and other items from the naming and foundation stone ceremonies will go on display in an exhibition at Parliament House in Canberra from January 14 until April 3.