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The municipality I was referring to is Mt. Isa with 43 000 sqkm, the same size as Denmark.
However, doing some research I've noticed that there is no strict definition of what constitutes a municipality, hence my own mistake in the original question when asking about cities.
For example Hulunbuir in Inner Mongolia is by some listed as the largest municipality with 264 000 sqkm, however this is a prefecture level city with many different urban centers (called cities in Chinese). This obviously creates unnecessary confusion, and I can see that any suggested answer could be challenged by these definitions. My intent was to define the largest municipalities in terms of self-administration ie the right of taxation, in order to show that what we usually think of as big cities, where we focus on population, has little correlation with acreage. In order to provide a "city level" administration and service to its population these municipalities sometimes need to include a lot of acreage to supply them with a tax base large enough to supply the required funding.
My apologies for the confusion. Perhaps Issybird is better equipped to provide a less confusing question?
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