A disappointing crowd gathered to hear the king speak
The King had invited the whole of the country's million-strong population to attend, but no more than 10,000 are reported to have turned up.
Trade union leaders, who have headed a pro-democracy campaign, called for a boycott of the meeting and this appears to have been heeded by many, despite the free transport of people by bus to the royal grounds outside the capital, Mbabane.
The chairman of a commission on constitutional reform, Chief Mangaliso Dlamini, told the small crowd that the King's powers would be enlarged, but gave no details.
King Mswati announced a new commission would now be formed to draft a new constitution.
"Swaziland is a unique country when compared to other African countries in that people are still able to register their concerns without taking up arms," he said.
Democracy blow
Correspondents say the announcement is a blow to to pro-democracy groups in Swaziland, where political parties have been banned since 1973.
"It was a report for Mswati and his brothers and sisters and not the Swazi people," said activist Lucky Lukhele.
The last time the king, who has absolute power, summoned his people was in 1996 to announce the setting up of the Constitutional Review Commission. About 250,000 people attended that meeting.
King Mswati who came to power in 1986, is coming under increasing national and international pressure to introduce democratic reforms.
In July the monarch was forced to repeal sweeping draconian laws which he had given himself to further tighten his already very firm grip on power.