The question here relates to the 'establishment' of the Roman Empire. I have always been confused by this historiographical issue as it would have been interpreted at the time.
27 BC is the year that historians used to mark the moment at which Octavian simultaneously became princeps, commander of Rome's armed forces with proconsular imperium, and given the name Augustus. Would this have been seen as a major turning point in Roman history at the time by regular citizens?
edit: Additional question: would it have been seen as a more radical move than what Caesar did? I feel like I remember that Ronald Syme argued that Augustus governed more like Pompey than Caesar in his efforts to maintain republican trappings.
Augustus was an incredibly intelligent man and used the apparatus of the existing republican structure to his ends. At the start of his reign, Rome itself had been controlled by a near constant string of dictator figures from Marius, to Pompey, to Julius Caesar, and then to the creation of the second triumvirate, which Augustus was a member of. After the civil war, Augustus feigned that he was going to give up all power back to the greatly weakened senate, and was subsequently begged to keep his position. He accepted on the condition that he be given a ten year consulship which allowed him to submit and veto documents presented to the senate floor. However it is important to note, that he would often times let others in the senate put forward his ideas and would even let bills he disagreed with pass in order to keep the senate feeling like it was truly empowered.
He was also given control of all border provinces, and made Egypt, which was the richest and most important province in the empire, his own personal territory and forbade anyone of senatorial rank from visiting the colony without his expressed consent first. (Some even rumored that Germanicus was killed for going their without permission but that is historical rumors that where never proven and should be taken with a very large grain of salt).
After the period often years, he refused another consulship and instead took a position as a tribune for life. This allowed him all the same powers of the consulship, but allowed the highly prestigious office to be opened up in order to sate would be rivals who craved a consulship. (As there are two consuls a year, by Augustus being named one for ten years it effectively cut the number of would be consuls in half.)
All in all Augustus, while being an Emperor, kept a far more republican visage than many of his predecessors. He was very practical in his administration, and careful to keep the trappings of power as hidden as possible and styled himself as princeps. Which means First Citizen. (Indeed the term Emperator is a military term granted to any general which has conquered lands for Rome, or won some great victory. Which is much different then how we view the term today.)
So in summation: No, it wasn't seen as a huge turning point at the time. Rome had known decades of tyrants and would be kings long before Augustus, and in his reign he kept a far more republican regime, or at least republican seeming regime, than most of his predecessors. And the Princeps model of a Republican First Citizen was followed to some degree by almost all of his predecessors until Diocletian who replaced it with the Dominus title and really drank into the cult of the emperor to draw his power and restore the regal and divine nature of the emperor.