The Crown opposed Lockett's original bail application, saying police had intercepted communications in which the 46-year-old claimed to be "a vicious, dangerous commando" who was "declaring war on this country". He was also alleged to have said: "White men are going to die in this country."
Prosecutors said Lockett was part of a group that had the potential to make a violent impact on New Zealand society.
He is to reappear on Friday on three firearms charges.
Those charged after the investigation into paramilitary training camps include a dancer, a labourer, a musician and a community worker.
Police said more serious charges were being considered.
"We simply got to the point where the activities that were going on in these camps were of serious concern and we felt that we had to act to disrupt those activities, bring charges where there was evidence under the Arms Act, and then consider whatever else might be possible under the Terrorism Suppression Act," said the Acting Deputy Commissioner for Operations, Jon White.
Lockett and Tuhoe activist Tame Iti are the only two of the 17 people arrested as part of the giant police operation who can be named. Name suppression has been granted to others who have appeared in court.
They face arms offence charges after the series of police raids around the country, centred on the hamlet of Ruatoki at the foot of the Urewera Ranges.
Police yesterday executed more search warrants but refused to say where. Mr White said they were hunting for more evidence and more arrests were possible.
Iti will find out today if he will be released.
In Rotorua District Court yesterday, Judge James Rota adjourned his decision on whether to grant bail, because of the appeal in Auckland against Lockett's bail.
But he allowed a Tuhoe kaumatua to address the court before Iti broke into a waiata in front of a crowd of about 70 people.
In Ruatoki members of the remote Bay of Plenty community met to discuss the events that have engulfed their town.
Police iwi liaison officers joined about 50 locals at a Ruatoki Valley Rd marae for the meeting.
A marae committee member, who did not want to be named, said residents wanted to discuss their dismay at the invasion of their community.
"Our family needs healing," she said. "A lot of them, even the children, got involved."