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The University of Otago, founded in 1869 by an ordinance of the Otago Provincial Council, is New Zealand's oldest university. The new university was given 100,000 acres of pastoral land as an endowment and was authorised to grant degrees in arts, medicine, law and music. The university opened in July 1871.

The Native Land Act 1873 allowed the Native Land Court to fragment land ownership among Māori. Instead of having 10 names listed as owners and the rest of the tribal group missing out, everyone with an ownership interest was now to be put on the title. Conceived as a way of recognising tribal ownership, it did not individualise land ownership but fragmented it. Individual Māori were not given blocks large enough to support themselves in the way Pākehā farmers could, but instead they received shares in blocks that were then partitioned and repartitioned into uneconomic segments at great time and expense, especially given the cost of surveyers and lawyers. This, and the ordinary costs of living, pressured many into selling their interests. Although intended to slow land selling, purchasers (both Crown and private) resorted to secretive methods, such as paying advances to numerous individuals, sometimes for years, before appearing before the Court and claiming the percentage of the block corresponding to their proportion of the shares. The effect upon Māori was disastrous. This fragmentation has bedevilled Māori land ownership ever since, making it extremely difficult to borrow development funding or utilise much Māori freehold land productively. A Repudiation Movement at this time, driven by a resurgence in rūnanga (council) or tribal management, aimed to repudiate or obtain compensation for bad land deals.

As rail, road and telegraph links improved, a county-borough system of local government came to be preferred over the provincial system established when communications had been difficult. The provinces were both powerful and autonomous enough to frustrate and obstruct the general government's initiatives in favour of their own local interests. The provinces were abolished by statute on 12 October 1875, although their names live on as regional divisions in various sporting and other national, non-governmental bodies.

Until 1877, education had been the responsibility of each respective province, with many schools being run by the Anglican, Catholic, Presbyterian or Methodist denominations. But with the abolition of the provincial system of governance, the central government took over the running of schools nationwide. Under the Education Act 1877, schooling was to be free, secular, and compulsory for all children aged between seven and 13, with Māori children given the option of attending state or native schools (established in 1867).

At its lowest point, the Treaty of Waitangi was described by Chief Justice James Prendergast in the Wi Parata v Bishop of Wellington case as "worthless", having been signed "between a civilised nation and a group of savages." This extreme view denied that the Treaty had any judicial or constitutional role in government because Māori were not a nation capable of signing a treaty. Since it had not been incorporated into domestic law, it was a "legal nullity". Although many of his conclusions were overturned by the Privy Council by the beginning of the twentieth century, his attitude largely prevailed from the 1870s to the 1970s.

On 21 February, 34 miners were killed in an explosion at the Kaitangata coal mine in Otago.

A resurgence of big Treaty meetings, at Kohimārama (Orakei) in 1879 and Te Tii, Waitangi in 1881 and at various centres on the east and west coasts, brought the Treaty back into prominence. Over 3000 people attended the Te Tii meeting, at which a monument to the Treaty was dedicated at Te Tii Marae and demands for a Māori parliament were put to the government.

On 14 November 1879, twelve years after Māori men received universal suffrage, legislation was introduced to give the right to vote to every male aged 21 and over, provided they had resided in the colony for twelve months and in their electorate for six months. Property qualifications were reduced but plural voting was continued, allowing a man to vote in each electorate in which he held property. This practice persisted until 'one man, one vote' was implemented in 1889. Moves to give the franchise to women and to increase the number of Māori seats were only narrowly defeated.

Telephone exchanges in both Christchurch (30 subscribers) and Wellington (10 subscribers) were opened during 1881, with more opening in other major centres over the next decade. Although telephones were not initially popular – by 1890, there were only 2000 subscribers – by the turn of the century, 7000 telephones had been connected. Toll lines began linking cities in 1906. In 1926, the Cook Strait cable was laid, and all the major centres had been connected by 1930.

After two years of tension and Māori non-violent resistance to land alienation in southern Taranaki, the Government occupied the town of Parihaka by force. From 1879, the prophet Te Whiti o Rongomai had encouraged his followers to uproot survey pegs and plough up roads and fences erected on land they still considered to be theirs, thus asserting that they did not recognise the Taranaki confiscation. These "ploughmen" were arrested and detained without trial. As roadmaking advanced up the Waimate plain, often across Māori settlements and cultivations, Māori erected fences across the routes, and more were arrested. Still Te Whiti resisted settlement, so the government sent a large armed force into Parihaka on 5-8 November 1881, commanded by Native Minister John Bryce. Although there was no resistance at all, he read the Riot Act, imprisoned Te Whiti and fellow prophet Tohu and dispersed his followers. At Te Whiti's trial for sedition, even officials had to admit that the 10125 hectares reserved for Māori had never been properly set aside for them to occupy and plant. Te Whiti and Tohu were exiled to the South Island to serve their prison sentences. Parihaka has been a symbol of Māori resistance ever since.