The narrator reportedly explains the Islamic state is trying to establish Allah's law on earth but are being attacked by Assad, the Americans, the West and various other foes.
The offence under the Films, Videos and Publications Classification Act is routinely seen in courts in relation to child pornography but it is understood this case is the first of its kind to go through the courts.
According to reports from 2014, "Flames of War" is a 55-minute video released by Isis highlighting the Islamic State's seizure of the Syrian Army's 17th Division base near Raqqah.
Captured Syrian soldiers are shown digging their own graves and are then shot point blank before falling in the ditches.
The narrator reportedly explains the Islamic state's is trying to establish Allah's law on earth but are being attacked by Assad, the Americans, the West and various other foes.
Nawarajan, who is in custody, also pleaded guilty to charges of assaulting police, resisting police and breaching bail.
A summary of facts could not be provided to the Herald because prosecution and defence lawyers were yet to thrash out the details of what was admitted.
Crown lawyer Henry Steele though, highlighted the issue of a letter allegedly written by Nawarajan that would likely be at the heart of the dispute.
Judge Russell Collins ordered Probation to interview the defendant and asked them to consider the possibility of a community-based sentence.
Nawarajan will be sentenced next month.
Another man, facing similar but more serious charges, is also before Auckland District Court.
He will enter a plea this afternoon.
