Bunyips are one of the very few monsters native to Australia... or at least the ones that anyone can actually name on a first guess. Found in Aboriginal Australian myths throughout the continent, the term basically means "devil" or "evil spirit", but has become particularly associated with a water-dwelling monster. The precise characteristics are hard to pin down beyond that, both because of its scattered multi-tribal origin and because there are so many different, contradictory accounts of what the bunyip is! Some of the most common descriptions of bunyips are a bizarre predatory mammalian creature resembling a seal, an amphibious dog, or a giant otter, or a bizarre long-necked small-headed "thing". At least one depiction of the bunyip characterizes it as a giant starfish! One of the few common characteristics is a massive booming or roaring call.
Theories as to what inspired the myth include encounters with Australian seals or cassowaries, a now-extinct giant marsupial of some sort, or even just the booming call of the shy, marsh-dwelling Australasian bittern.
In Dungeons & Dragons, the bunyip appeared in Advanced Dungeons & Dragons and was described as a weird combination of seal and shark, being a seal-like mammal with shark-like body and shark-like jaws. They are not evil, just rather playful and mischievous, but the combination of that personality with a big, strong body and a set of jaws that can easily bite off limbs is dangerous. They don't prey on humanoids in general, but small humanoid races such as dwarves, gnomes, halflings and goblins are within the size range of their usual prey, so a bunyip that finds one struggling in the water is likely to go with its instincts and try to make a meal.
In Pathfinder, the bunyip is also a seal-shark hybrid, but it's much more aggressive and voracious than its AD&D counterpart. There are several noted varieties, including the arctic bunyip, the swamp-dwelling muck bunyip, and the open-ocean-ranging ocean bunyip.