I’m glad you brought this question up. Mostly because I hate when people bring questions down.
But in all seriousness, I am delighted in answering your question because it involves my 4th favorite subject: Andre the Giant!
The late wrestler was a god-among-men for sure. And not just because he was huge. His heart was just as equally as huge and a sweet sweet man. And because of his great size, his life was a rather interesting one. Like did you know he once drank 16 bottles of wine in 4 hours AND then wrestled 20 men in a battle royale? It took 2 full bottles of vodka just to get him buzzed! One time he flipped a car over with 4 people inside because they pissed him off. He was known to eat 12 steaks and 15 lobsters in one sitting! And when he was younger he was rejected by the French army because he was way too large. When he visited Japan, he was forced to shit in the hotel bathtubs because the toilets were too small! He was truly a wonder of the world. But I’m getting off our main topic.
But the time frame of The Princess Bride is interesting because like you noticed Vizzini mentions Australia as a land of criminals and you’re correct, that continent wasn’t discovered until 1788. So does this mean that The Princess Bride takes place in the 18th or possibly the 19th century? Nope—not exactly. It actually all takes place in the year 1973. There was a deleted scene in the film where Count Rugen, who was actually some inventor from modern day Duluth, Minnesota, who actually made a time machine but the had one unique catch—It didn’t necessarily transport people or things into the past but made the present seem like the past, almost like virtual reality. So the film and its characters are actually from 1973 and are still in 1973 but their minds have been warped to thinking that it’s some time in a RenFaire-like timeline. And top of that, its on a loop so they have been “living” in this state for many years but in our time, it’s only been a few days. So add to the distorted reality and slow time elapse-effect, the character’s minds are slowly turning into mush. They are stuck in a time that is not their own and it’s warping their minds. It’s my theory that Vizzini’s mind still has some common knowledge of the modern world and that’s why when Vizzini mentions Australia, he knows geographically that it exists but his mind is forced to historically describe it as the “land of criminals” to play along to the time-traveling aspect. Even though he’s still off by a few centuries, historically, I think his mind is still playing “catch-up” with the rest of the characters. Where they are exactly in 1973 is anyone’s guess, but my theory is that they are now in a sanitarium giving the fragile mental state that they are in.
What’s this have to do with Andre the Giant? Well, nothing really. You mentioned The Princess Bride and I just wanted to talk briefly about how awesome Andre was. Sorry, I’ve been drinking.
Your picture pal,