What is meant by "Country of residence" in Australian Visa Application form?

Note the word 'usual'. If you're on a tourist visa in another country for just 6 months, that's not really where you NORMALLY reside. You're considered a visitor in that country, not a resident.

In this case it's likely to be your country of citizenship, if that's where you usually live when you're not travelling on this tourist visa.

Your residence

What address would you give someone who intends to send you critical correspondence at some indefinite point in the future? Where do you have your mail shipped? Where do you receive your bills? What address does your most recently opened bank account have on it? What address do you put on your tax forms? What address is nearest the school you would send your kids to (if you had any)? Etc.

That is your current residence. This is not always the same as your citizenship.

An example

Residence: I live in Japan. My kids go to school there, I have a permanent residential address, have a residency visa, etc.

Visitor: I visit other countries for work for several months at a time. Sometimes I rent an apartment, sometimes I'm staying with people I know (at their residence), but I might leave at any time and am usually either on a work visa or tourist visa.

Citizen: I am an American citizen. I was born in Texas and my passport says so.

Where you live, where you are, and what place claims to own you.

You can be in-between

For a few years I didn't really have a residence. I hopped around a lot and didn't have a single city or even country I could call "home". If someone had, in an official capacity, asked me where I lived I would have still replied "Texas". Even though that wasn't true in the sense that I hadn't been there for a few years, it was more true than claiming some place I had only been staying for a few weeks or months and knew I wouldn't be in much longer (especially on a tourist visa).

It is useful to note that many official bureaucracies (and their documents) are particularly unfriendly to people who don't fit the "born, schooled, worked, died -- all in the same 10 miles" mould. This bureaucratic detail can significantly hinder your efforts to get even the simplest things done in life, despite being a completely made-up problem. For that reason it is usually much less painful to use your place of birth or your family's residence (if you have a family or parents) as a sort of administrative anchor rather than try to explain the details of your situation.

The question boils down to:

Do you have permanent residency in another country; rather than than the one which issued your passport?

For example, I live and work in Kuwait. I am not a Kuwaiti citizen, but a permanent resident.

So for that application, I would put Kuwait as the country of my residency, even though its not the country of my nationality.

The form asks for an address in your country of residence. Figure out which address makes sense. The country that is in is your country of residence. I think that should be the crux of the question.

If you don't have an idea of which address or addresses to use for that part of the form then maybe you need an immigration attorney to interpret the question for you confidentially. Sometimes a situation is completely legal but hard to explain, and that's what those attorneys are for.

Country of residence means exactly that, where you're living right now. I've come across forms with this phrasing, usually they ask you about citizenship in a separate question later

Also note the little question mark next to the question, that can give you a hint as to how they define country of residence

This was a subject of discussion in the EU. The consensus seems to be, for the majority of cases, that this is the place where you pay your taxes (except if you have formally requested residency)

This is not always the case, though: in cases where you wonder whether you should switch to another country's driving license, you should use the one of the country your car is usually parked in.. This has apparently changed in 2013.

I found out this when doing some research in the past, form memory it was on the EU web site, deeply hidden. This does not cover the exotic cases, thought (when someone lives in multiple countries throughout the year and does not have the usual clear cut for taxes (which is 1/2 year + 1 day))

In this case since you are to be invited for an interview at the closest destination to you, the country of residence is where you live right now.

Your country of residence is where you spend over 50% of the time when you are not being a tourist.

Excluding all the time you are travelling on a tourist visa, where will you spend 50% or more of your year? This may be in the country of your citizenship, but could be where you have a work visa, or permanent resident's visa.