How Locations work
Locations are added via your Shopify admin, and will be reflected in Australia Post Shipping once you Resync Locations.
You can edit locations via you Shopify admin or via the Australia Post Shipping app.
Edits made in Shopify will be reflected in Australia Post Shipping once you Resync Locations.
Edits made in Australia Post Shipping aren't reflected in your Shopify admin but they do override your Shopify settings. In other words, when the app is quoting rates to your customers at the checkout or using locations information for order fulfillment, it will preference location information you have input to Australia Post Shipping over the Shopify location information.
Setup your locations
Once you've installed the Australia Post Shipping app, you'll want to make sure your Locations are setup in the app.
From the Australia Post Shipping dashboard, click Settings.
In the 'Locations' section, click Resync Locations to refresh the list of locations.
You'll see a refreshed list of the locations you have setup in your Shopify admin.
To find out more about Locations from Shopify, you can read their article on Locations here.