Axis naval activity refers to when ships and submarines from the Axis powers (led by Germany, Italy, and Japan) moved into Australian waters during World War II. Waters are areas of the ocean that are near a country or island. Australia is a big island on the bottom of the world. When enemy ships come into your waters, it means they can get closer to your country and attack it easily.
The Axis navies wanted to get closer to Australia because it was an important place for the Allies (led by the United States, Britain, and other countries) to fight against them. Australia is close to Asia, where the war was happening, and it had important ports and bases that the Allies used to plan their attacks. The Axis powers wanted to stop the Allies from using Australia as a base and take over the country themselves.
To do this, they sent submarines and ships into Australian waters. Submarines are like big underwater boats that can sneak up on other ships without being seen. Ships are big boats on the surface of the water that can carry weapons and soldiers. The Axis ships tried to attack Allied ships and ports in Australia, but the Allies were prepared. They had their own ships and planes to fight back.
The Axis naval activity in Australian waters was a big deal during World War II because it put Australia in danger. The country had to work hard to protect itself and its people. But in the end, the Allies were successful in stopping the Axis powers from taking over Australia and the rest of the world.