A practical AI glossary for leaders in local government
Artificial intelligence is rapidly becoming part of conversations across local government. From customer service and community engagement to service delivery and operational efficiency, councils are exploring where AI can provide value and where caution is required.
However, one of the biggest challenges isn’t the technology itself; it’s the language we use to describe the technology.
Terms like generative AI, large language models, copilots, retrieval-augmented generation, and machine learning are increasingly appearing in board papers, strategy discussions, vendor presentations, and industry events. For many government leaders, these concepts can feel technical, confusing, or open to interpretation.
A shared understanding is essential if organisations are to make informed decisions about AI adoption, governance, risk, and community outcomes.
This glossary has been developed specifically for Australian and New Zealand local government leaders and practitioners to provide a practical introduction to some of the most commonly used AI terminology.
Topics Covered:
- Why a Common AI Language Matters
- Foundational artificial intelligence concepts
- Preparing for the Future of AI in Government
Why a Common AI Language Matters
Councils are under pressure to modernise services, respond to growing community expectations, and improve operational efficiency while managing constrained budgets and workforce challenges.
At the same time, AI is evolving quickly.
Without a shared language, discussions about opportunities, risks, procurement, governance, and implementation can become difficult. Establishing a common understanding helps leadership teams, operational staff, technology leaders, and elected officials evaluate AI solutions more effectively and make better-informed decisions.
Foundational artificial intelligence concepts
Artificial Intelligence (AI)
Artificial intelligence refers to computer systems that can perform tasks that would typically require human intelligence. These tasks may include understanding language, recognising patterns, analysing information, generating content, making recommendations, or supporting decision-making.
For local government, AI has the potential to improve both resident experiences and internal operations by helping staff deliver services more effectively and efficiently.
Machine Learning (ML)
Machine learning is a subset of AI that enables systems to learn from data rather than being explicitly programmed for every scenario.
Machine learning models identify patterns within data and use those patterns to make predictions or recommendations.
Examples in local government may include analysing service request trends, identifying community sentiment patterns, or forecasting demand for council services.
Generative AI
Generative AI is a category of artificial intelligence capable of creating new content based on a user’s request or prompt.
This content may include:
- Written responses
- Summaries
- Reports
- Images
- Audio
- Software code
Popular examples include ChatGPT and Microsoft Copilot. Increasingly, purpose-built government solutions are also incorporating generative AI capabilities to improve resident and staff experiences.
Agentic AI
Agentic AI refers to AI systems that can not only understand and respond to requests, but also take action, follow workflows, make decisions within defined rules, and complete tasks across multiple systems.
While many generative AI tools are designed to create content or answer questions, agentic AI is designed to help complete work.
For example:
| Generative AI | Agentic AI |
|---|---|
| Drafts an email | Sends the request into the appropriate workflow |
| Answers a question | Completes a service request |
| Summarises information | Updates records and tracks progress |
| Provides recommendations | Takes approved actions within defined rules |
For local government, agentic AI has the potential to support more complex service delivery processes by connecting conversations, information, workflows and business systems into a single experience. Examples may include service requests, permit applications, facility bookings, or community enquiries. Agentic AI is action-oriented, helping move work through government processes while maintaining transparency, governance, and human oversight.
Large Language Models (LLMs)
Large Language Models, often referred to as LLMs, are the technology behind many generative AI tools.
LLMs are trained on vast amounts of text, enabling them to understand language patterns and generate human-like responses.
While highly capable, LLMs do not automatically understand a council’s policies, procedures, or local information unless they are connected to trusted organisational content.
Natural Language Processing (NLP)
Natural Language Processing is the area of AI that enables computers to understand, interpret, and generate human language.
NLP allows people to interact with technology using natural conversation rather than specific commands or technical language.
Many resident-facing digital assistants, chatbots, and service portals rely on NLP to improve accessibility and ease of use.
Generative Pre-trained Transformer (GPT)
GPT stands for Generative Pre-trained Transformer, a specific type of large language model.
GPT models are trained on large volumes of information and can generate responses, answer questions, create content, and assist with research tasks.
Many widely used AI applications today are powered by GPT-based technology.
Retrieval-Augmented Generation (RAG)
Retrieval-Augmented Generation, commonly known as RAG, improves AI reliability by connecting AI models to trusted information sources.
Instead of relying only on information contained within the model itself, RAG retrieves relevant information from approved organisational content before generating a response.
For councils and government organisations, this helps ensure responses are based on current, accurate, and approved information rather than generalized knowledge.
Hallucinations
A hallucination occurs when an AI model generates information that appears convincing but is inaccurate, misleading, or entirely fabricated.
While modern AI systems are improving rapidly, hallucinations remain an important consideration when evaluating AI solutions.
For local government, minimising hallucinations is critical because residents and communities expect accurate, trustworthy information.
Prompt
A prompt is the instruction, question, or request provided to an AI system.
The quality of a prompt often influences the quality of the response.
Examples include:
- “Summarise resident feedback from this consultation.”
- “Draft a response to a community enquiry.”
- “Analyse the main themes from these survey results.”
Prompt Engineering
Prompt engineering refers to the process of designing effective prompts to achieve more useful and accurate outputs from AI systems.
As organisations adopt AI, developing strong prompting skills is becoming an increasingly valuable capability across both technical and non-technical teams.
Human-in-the-Loop
Human-in-the-loop refers to maintaining human oversight during AI-supported processes.
Rather than allowing AI to operate entirely independently, people remain responsible for reviewing, approving, monitoring, or escalating decisions where necessary.
For government organisations, human oversight remains essential for decisions involving policy interpretation, regulatory obligations, risk, or community impact.
Automation
Automation uses technology to perform repetitive tasks with minimal manual intervention.
Examples may include:
- Routing service requests
- Sending notifications
- Updating records
- Processing routine transactions
When combined with AI, automation can improve efficiency while enabling staff to focus on more complex and strategic work.
Data Privacy
Data privacy refers to how information is collected, stored, managed, and protected.
For government organisations, privacy considerations are especially important when evaluating AI technologies.
Key questions often include:
- Who owns the data?
- Where is data stored?
- How is information protected?
- Is customer data used to train AI models?
- What privacy controls are in place?
Maintaining public trust requires strong privacy controls and clear governance.
Explainability
Explainability refers to understanding how an AI system reached a particular recommendation, response, or outcome.
For local government, explainability helps support transparency, accountability, and public confidence in decisions influenced by AI.
As AI becomes more prevalent in public sector environments, explainability is expected to play an increasingly important role in governance frameworks.
AI Governance
AI governance encompasses the policies, controls, processes, and oversight mechanisms used to manage AI responsibly.
Effective governance helps organisations address:
- Transparency
- Accountability
- Risk management
- Ethics
- Privacy
- Security
- Regulatory compliance
Strong governance frameworks help ensure AI delivers value while maintaining community trust.
Preparing for the Future of AI in Government
AI is no longer a future consideration for local government. It is becoming an increasingly important part of how organisations think about service delivery, community engagement, operational efficiency, and workforce productivity.
The most successful councils will be those that adopt AI thoughtfully, responsibly, and with a clear understanding of how it aligns to community outcomes, transparency, and trust.
Having a common language is a simple but important starting point.
As AI continues to evolve, organisations that invest in governance, education, and shared understanding will be better positioned to evaluate opportunities, manage risks, and deliver meaningful benefits to both residents and staff.
How AI Benefits Local Government Services
Unlike traditional AI tools that focus on answering questions or generating content, agentic AI is designed to take action. It can understand a resident’s request, gather information, follow business rules, complete tasks across systems, and support end-to-end service delivery.
For local government, this means agentic AI can help:
- Provide 24/7 access to council information and services across multiple channels and languages.
- Reduce pressure on frontline staff by automating routine enquiries and repetitive administrative tasks.
- Connect resident interactions directly to workflows, service requests, and back-office systems.
- Improve service efficiency by capturing information, routing requests, and tracking progress automatically.
- Deliver more consistent, accurate, and policy-aligned experiences using verified council content and governance controls.
- Support transparency and accountability through human oversight, defined approvals, and governed decision-making processes.
Agentic AI helps councils move beyond providing information to actually helping residents complete tasks, access services, and resolve issues more efficiently.
Learn More
Discover how Granicus Experience Agent (GXA) is helping governments explore AI in a governed, transparent, and trusted way while improving service delivery and resident experiences. Built specifically for government, GXA combines conversational AI with workflow automation to help organisations modernise digital services while maintaining control and accountability.