At the risk of oversimplifying, the basic history of the Australian Aborigine is as follows.
The first Aboriginal settlers colonized what is now Australia between 40,000 and 80,000 years ago via what is now Papua New Guinea or what is now Indonesia.
Like all civilizations, they destroyed as much of the natural environment as their technology would allow. After they had done this a steady state (sometimes called ecological harmony) resulted.
The Australian environment was very harsh for a low technology people, but they adapted well, and bred up to somewhere between 200,000 and 500,000 people. Their technology was not advanced, but it served them pretty well and they were able to spent a lot of their time finger-painting on the walls of caves and making up stories about the Dream Time.
European settlers with more advanced technology arrived in 1788 from England and began re-colonizing.
They got on rather badly with the locals. Two primitive cultures based on force and exploitation (and nothing else in common) were bound to clash badly.
The European settlers were embarrassed by this, and the English ordered the Australian Governor to make a treaty with the native population. He was unable to do so, partly because of limited resources (life was not just brutish and short for the Aboriginal population) but mostly because there was no central Aboriginal authority to deal with. The Aborigines were in relatively small tribes, spoke many different languages and spent much of their surplus waring with each other. Negotiating with all of them was nearly impossible. The Local Governor reported this to his English command.
The English were embarrassed by this, and as a convenience they declared Australia 'Terra Nullius' (effectively uninhabited).
The European settlers passed many diseases to the Aborigines, who through their isolation for so long, had little resistance. In particular, two plagues of small-pox in 1792 and 1822 swept through the Aboriginal populations and wiped many of them out. There was also a plague of venereal disease, but many believe this was contracted from non-European fishermen in the north of Australia.
There was a low level war over a period of time. Aborigines would take sheep from local farmers (and eat them). Farmers would go and kill the Aborigines.
The area became the nation of Australia in 1901, and though it was basically democratic, Aborigines were not eligible to vote. They were not classified as 'Australians'.
The last mass-killing of Aborigines was in 1926 after a European-Australian was reported killed by an Aborigine, and a local-policemen collected a gang of people to kill the local tribe. The more senior authorities were embarrassed by this, and took steps to prevent it reoccurring.
Generally Aborigines were encouraged to move to 'settlements' away from the European infrastructure where they would cause less trouble.
The Europeans always considered Aborigines as racially inferior to them, and it was widely believed that they would simply 'die out'. This belief was challenged a bit by the number of mixed-race children which started springing up in Aboriginal settlements. [Mixed-race children are always a problem for racial supremacists].
This embarrassed the European descendants, particularly as most of the mixed-race children were being raised in conditions which they felt whites (even part-whites) shouldn't be raised in.
In the 1930s, 40s and 50s, government, charitable and church groups moved many mixed-race children into orphanages, and in some cases helped adopt them into white families. It was felt that part-white children could be integrated into white society. Some Aboriginal and part-Aboriginal parents gave up their children voluntarily, some children were taken by force. About 15% of children are thought removed from their parents in this time.
Many white children were also removed from their mothers during this time - particularly single mothers who, it was felt would be unable to raise their children (though very few by force). Separating parents and children generally was a pretty fashionable thing to do.
In 1967 after a federal referendum on the topic, Aborigines became citizens and were allowed to vote in state and federal elections.
By the 1980s it was considered a bad thing to remove children from parents generally, and the population was embarrassed by the history of encouraged and forced removals. Spurred on by new leftist politically correct ideologies, the (now adult) children saw this as an opportunity for protest and for monetary compensation.
The government commissioned appropriately socially-minded experts to hold inquiries, and the term 'stolen generation' was born.
Aboriginal activism continued strongly, but was splintered by different groups pushing in different directions.
Some Aboriginal groups believed that their culture was irretrievably lost, and the best way forward was to integrate into the mainstream population. Unfortunately they were not culturally well-equipped to handle it. Modern first-world culture is very different to tribal culture. Modern economies are based on production, not relationships. They are based on ownership, not community. And they are based on long term sacrifice and planning, not reaction.
Some Aboriginal groups thought that going back was the way forward, and that they were better off living in tribal environments isolated from the rest of society. Many of their politically correct European countrymen were keen on this idea - it was a chance to curate their indigenous populations, in the same way that many older Australians have a statue of an Aborigine in their front yard instead of a garden gnome.
However, the attractions of Western technology, culture and drugs were more attractive to many Aborigines, so an curative approach didn't work.
Most solutions suggested for the future of the Aborigines were a contradictory mixture of the integrative and curative extremes, and were destined to result in an indefinite reliance on welfare, and hence relative poverty.
The reality is that Aboriginal culture has nothing to offer modern Australia apart from some interesting painting styles (lots of dots), interesting musical sounds (like the didgeridoo), and quaint myths about the dream time. To ignore this fact is to sentence yet more Australian Aborigines to dependence and relative poverty.
Three generations of welfare dependence have not helped the Australian Aborigine. Cultural subsidization, rather than making them proud of their cultural heritage, has prevented them adapting to their new environment. Affirmative action has just made people suspicious of any Aboriginal with a job or a qualification, and has created mistrust and resentment from others who feel it has reduced their own opportunities.
Only when mainstream Australia stops patronizing the Aborigines will Aborigines truly become members of it.