you can apply either onshore or offshore, but you must be in Australia at the time of the decision. After the initial assessment, you will be asked to come for an interview. You will not sit the citizenship test. The outcome of this will be communicated in writing.
If the outcome is successful, most applicants will receive an invitation to a ceremony, generally within 6 months of approval. If you are not required to attend a citizenship ceremony, your citizenship certificate will be sent to you at the same time as your approval letter.