Several women's football teams on Wednesday, including Britain, New Zealand, the United States and Sweden took the knee before their games in Tokyo, in support of racial equality.
The Matildas chose instead to unfurl a flag of the first peoples of Australia.
"In team sport, I think that it is very common for successful teams to come together to do certain things that, you know, help build the camaraderie of the team." Mills, a 2014 NBA champion with Indigenous heritage, told reporters.
Australia won their Group G opener 2-1 against New Zealand. Black players in the England men's team were subjected to a storm of online racist abuse this month after their Euro 2020 final defeat, drawing widespread condemnation from the squad's captain, manager, royalty, religious leaders and politicians.
The International Olympic Committee's Rule 50 forbids any kind of "demonstration or political, religious or racial propaganda" at the Games but, under mounting pressure, the Olympic body recently relaxed it for the Tokyo Games.
Athletes can now express themselves on the field of play as well, apart from press conferences and interview, as long as other competitors are unaffected by their gesture.
Any protests, such as taking the knee or raising the fist, on the podium remain banned.
The Tokyo Olympics, which officially open on Friday, will not have any fans in the stands due to the coronavirus pandemic.