Okay...in Australia there is lots of slang words, these are called "colloquialisms" and every country has them. These days though these words are becoming more universal though I have to say that some will only ever be heard in Australia.... . Basically this is where one word is rhymed with another or shortened, the spelling is changed or whatever. Australia is full of slang words...dosh=cash, dead horse=tomato sauce, iffy=questionable, arvo=afternoon, ac=airconditioner, septic tank=an american...just to name a few..... . To arrive at Oz Im guessing that Aussie, sounds a little like Ozzie and then it was shortened. Its rather appropriate given that Australia is considered to be a little like the Emerald City in that it is a far away, mythical place where most people only dream of going. Of course to modern day terms...Australia was a prison colony just like the Ozwald Penetentary in the HBO series Oz...