The creation story of Mudungkala, an old blind woman who digs the straits between the Tiwi islands and Darwin, carrying her three infant children on her back, has been handed down orally from mother to daughter.

"She dug a hole and the water come through, and then the water filled up the hole and she drowned," relates Barbara Darcy.

Barbara is a super-smart 11-year-old, one of four girls from the remote primary school of Milikapiti who have travelled with their principal to Sydney to help celebrate Indigenous Literacy Day at the Sydney Opera House on Wednesday.

The event is organised by the Indigenous Literacy Foundation, the not-for-profit charity which has delivered more than 140,000 books to Indigenous communities across Australia and runs the Great Book Swap as a fundraiser among businesses and schools.

The foundation has brought illustrators, authors and poets, book packs for preschoolers to Barbara's school, plus a bush book library that is open to children and adults alike.

Resources are an essential first step on Melville Island, says Tina Raye, the foundation's program manager, where there are too few books in homes.

"We take for granted in big cities there are libraries and bookstores and access to them," says Raye. "These remote communities have small libraries and the types of books are not necessarily relevant and appropriate."

Barbara owns two books gifted by the foundation. Marguarita Palipuaminni, 12, has the one, a copy of The 39-Storey Treehouse she received when Andy Griffiths, a foundation ambassador, visited her school. Margie keeps the book in a secret hiding spot for treasures.

The children's author, Alison Lester, has twice visited and her collaboration with the 71 students of Milikapiti Primary has grown into a funny rhyming book, No Way Yirrikipayi, about a hungry crocodile who chases dugongs, turtles and stingrays for his next meal. The story idea took off after chatting with the kids about the local animals.

"Someone said there were crocodiles, and so I said, 'What's the Tiwi word for crocodile?'. And they said, 'Oh Yirrikipayi', and then someone else shouted out, 'No way Yirrikipayi'.

"So we started playing with that idea, and there were a couple of kids in the group who were funny and full of beans and they carried the rest along."

Lester's first contact with remote Aboriginal schools dates to the family trip on which she based Are We There Yet?. She says it's important to get culturally relevant books into the hands of young Indigenous people.

"That is so much what it is all about; to see yourself reflected in books," she says. "If you only ever read about other people in books it's hard to feel like you are part of the world."

Principal Suzanne Brogan says the book has cultivated among her young charges a sense of appreciation for literature, which she tells them is the "switch code" that will help them bridge the mainstream world and their own community.

No way Yirrikipayi will be available in book stores from October.