A teenager arrested overnight on terrorism-related offences had allegedly written a Facebook post saying he was on his way into the city to kill 20 people.
The 17-year-old was arrested at his home at The Oaks, about 25 kilometres west of Campbelltown, on Tuesday night.
He was taken to Narellan police station and charged just after midnight.
Police say they arrested the boy "after being alerted to a number of social media posts".
However, his baffled family said the boy was not at all religious and was of Greek origin. He left the house on Tuesday but went only to Camden and Warragamba, they said.
The boy also has special needs and has gone missing from his home on at least two occasions.
On one occasion in 2014, his family spread a message on social media begging for people to look for him but warning them not to approach the boy because he is strong and can get aggressive.
On another occasion this year, he had to be rescued from the bush by PolAir. He then posted a message online thanking the police.
Police sources told Fairfax Media the boy was not considered a religious extremist but was making threats that were "imminent".
Nine News reported that he made posts allegedly supported the Orlando nightclub shooting and made threats of carrying out something similar in Australia.
He was charged with one count of acting in preparation for, or planning, a terrorist act, contrary to Section 101.6 of the Commonwealth Criminal Code, police said.
He was also charged with using a telecommunications network with the intention to commit a serious offence, contrary to section 474.14 of the Commonwealth Criminal Code.
The youth was refused police bail and is due to appear at a children's court on Wednesday.
Police said there was "no threat to the community" and the boy's arrest was not related to any previous investigation carried out by the NSW Police Joint Counter Terrorism Team.
