At the memorial held on Sunday in Appin, near where the killings took place, thousands of people joined Dharawal descendants to mark the anniversary of the horrific acts.
In 1816, Governor Lachlan Macquarie ordered one of his regiments to "rid the land of troublesome blacks", according to his diary.
In the middle of the night on April 17, 14 men, women and children were killed. Some were shot, others were trampled by horses and some were run off the cliffs.
Some of the bodies were hung from the trees, others had their heads severed and sent abroad.
The skulls have since been sent back to Australia, and are currently in the National Museum in Canberra.
One of the descendants, Gavin Andrews says until the remains are back on country, the ground is "spiritually unsafe".
“The site is disturbed in that manner, so we don't take people there or go there,” he told The Point.
Mr Andrews said the massacre was a government-ordered military campaign against the local population.
“Appin signifies what I consider to be the first formally ordered military campaign ordered by the government of the day against the Aboriginal peoples of this area, and that to me represents a declaration of war,” he said.
The memorial focused on moving forward in harmony, but Mr Andrews also acknowledged the attitude of the governor at the time.
"If you went out and shot blacks ... you were immune from any prosecution."
Addressing the crowd at Cataract Dam, NSW Minister for Aboriginal Affairs Leslie Williams admitted that "it’s a dark event in Australia’s history, but one that cannot be forgotten."
“If we're going to move to reconciliation, then we do need to have healing as the basis for that,” she told The Point.
A memorial plaque near the site of the killings is the only marker that the event took place.