No, in no way was Octavian/Augustus a ceremonial figure. He was THE power in Rome. What he "gave back" to the Senate in 27 BCE was nominal control of the provinces, which was all for show. These provinces were immediately "given back" to him by the Senate, of which he kindly only retained Spain, Gaul, Syria, Cyprus, and Egypt, for a period of five years plus five additional years. This gave him nominal control of virtually all Roman soldiers anywhere on Earth. What was left became the "Senatorial" provinces, mostly quiet places where few soldiers were stationed. For one man to control multiple provinces at once was rather anathema to the Roman system, so the Senate pre-arranged for Augustus to hold the consulship continuously down to 23 BCE, thus ensuring his uninterrupted imperium. This meeting in 27 is usually called the "First Settlement."

To repeat what I've written before on this: The nuance of the First Settlement is that it allowed the Senate room for dignity, whereas the dictatorship of Caesar had not. The Republican machinery was still running, sort of, and the senate still had business with which to busy themselves--just not in Spain, Gaul, or Syria! There were tax contracts to be awarded, envoys to be interviewed, proconsular appointments to be distributed, work contracts, etc etc etc. Immediately after the meeting in January of 23, Augustus left the capital to wage war on uncooperative tribes in Gaul and Spain, and he did not come back until 24 BCE. This gave the senate, and the capital, and Italy, and the world time to get used to the arrangement.

Then in 23 comes the "Second Settlement." His prearranged consulships were to expire, and now Augustus decided that he did not need the imperium implicit in the consulship any longer, which was by its very nature renewable but temporary. Instead, he took tribunicia potestas (the power of a tribune of the plebs) for life, giving him implicit veto in the senate, the ability to call a meeting, etc. His commands in his provinces (Gaul, Spain, Syria etc) were then renewed, giving him imperium proconsulare in those places (and there only, technically). This meant that, technically, he could not tell armies what to do in Italy (or anywhere else outside of his provinces). By this point it did not matter, because any potential rival who could wrest away control of the legions was immediately and quietly dealt with. That he was able to leave off the consulship in 23 suggests how entrenched his authority had become. The Roman world was weary, worn out by a century of civil wars, and Augustus was the man left standing.

There were some further changes in 19. Most sources say he was awarded imperium proconsulare maius ("greater proconsular imperium") in 19, which would have given him the ultimate authority over any army anywhere in the world. Just an afterthought by then, but it completed the basics of the emperor's power: imperium maius over everything; limitless power of the tribune of the plebs; permanent control over the armed provinces; and some other random symbolic possessions, like the office of Pontifex Maximus.