Christmas Island and the Cocos (Keeling) Islands group are located in the Indian Ocean. They developed as small outposts of the British Empire from their first settlement in the early 19th century until they were caught up in the world decolonising movement of the mid-20th century. Their paths of development were very different, with one depending on the exploitation of rich phosphate deposits, and the other on the harvesting of the products of copra plantations. But both attracted immigrant workers from South East Asia, and as these workforces matured they generated demands for democratic participation in their own governance. This article notes this history, and then tracks developments over the past 50 years, including their conversion to the status of external territories of Australia; a gradual process of bringing them together as a single territory for purposes of governance; and rising tensions as their populations have sought to win democratic governance rights in the face of a seeming lack of sympathy by the Australian government which considers them too small to warrant such treatment. The impasse that has developed in shaping an appropriate governance structure for these islands is seen here, arguably, as a case of “democratic deficit”.