The distinction between a colony and an overseas territory

What is the difference between a colony and a British Overseas Territory?

An overseas territory is largely self-governing in domestic matters, while Britain retains responsibility for areas such as foreign policy and may appoint a governor or equivalent representative.

The Falkland Islands provide the example of a British Overseas Territory. Such territories govern most of their internal affairs while Britain retains responsibility for foreign policy and related external functions. A governor or equivalent representative may remain, although titles and arrangements can change. The distinction is constitutional and practical rather than a modern relabelling of an unchanged colony.