Prior to the act, the basic document setting out the governance of New Zealand since the signing of the Treaty of Waitangi was the Charter of 1840, which specified:[1] The Executive and Legislative Councils met infrequently during the governorships of William Hobson and his successors, Willoughby Shortland (as Administrator), Robert FitzRoy and Sir George Grey.

This was particularly the case in Wellington which, as a New Zealand Company settlement, briefly had its own independent governing council, until Governor Hobson sent his Colonial Secretary, Willoughby Shortland, and some soldiers to Port Nicholson to end any challenge to British sovereignty (the colonists had set up a "colonial council", which Hobson described as a "republic", in March 1840 headed by William Wakefield).

In a dispatch to the colonial secretary Earl Grey, Governor Grey stated that in implementing the Act, Her Majesty would not be giving the self-government that was intended, instead: ...she will give to a small fraction of her subjects of one race the power of governing the large majority of her subjects of a different race... there is no reason to think that they would be satisfied with, and submit to, the rule of a minority[4]In 1848 (just before Governor Grey created two provinces, New Ulster and New Munster) the British Parliament passed the Government of New Zealand Act 1848 under which parts of the 1846 Act dealing with establishment of provincial assemblies and the General Assembly were not to come into force for another five years.

In 1851, under the authority of the 1846 Act, Grey made the town of Auckland a municipality, but this step did not relieve the pressure for a Legislative Council which would be representative of the whole province.

Grey, however, proceeded to implement the ordinance with such deliberation that neither Council met before advice was received that the Parliament at Westminster had passed the New Zealand Constitution Act 1852.