I had never heard this use before, but the Oxford English Dictionary lists as one of the definitions of toby to be "the highway" in thieves' slang. It is thought to have originated from toba' from tobar, the word for "road" in Shelta, the secret language of the Irish tinkers. It dates back in print to 1807.
In New Zealand, 'toby' is widely used to mean the mains water tap outside a house frontage, presumably because it is on, or at the side of, the highway.
This seems to have spread from Irish immigrants to Australia, and thence to NZ. Where the word is never used for 'highway', though it probably still is in the UK (where a 'Tobyman' meant a highwayman.
As a diminutive of the name Tobias, the Toby jug (Toby Fillpott) has no connection; it occurs in Cockney rhyming slang in 'toby jugs' for ears (lugs). Similar to 'Tobermory' for an unlikely story, from the main village of the island of Mull in Scotland.
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