HMAS "Sydney, named after the Australian city of Sydney, was one of three modified "Leander"-class light cruisers operated by the Royal Australian Navy (RAN). Ordered for the Royal Navy as HMS "Phaeton, the cruiser was purchased by the Australian government and renamed prior to her 1934 launch.
The ship formerly known as Phaeton was renamed for an area under its government's control.
This statement is correct because the ship was named for Australian city Sydney, which is under the Australian government's control.  I think the somewhat confusing wording of the statement is what fooled the model.