The Holkars take their family name from the village Hal or Hol on the Nira river, 40 kms from Poona. Malhar Rao Holkar (1728-66) was the founder of the Holkar dynasty of Indore. A soldier of high caliber and a trusted officer of Peshwa Baji Rao, he was posted in Malwa to realise 'Chouth' and 'Sardeshmukhi'. He became the ruler of Indore by 1739, His daughter-in-law Ahilya Bai (1767-95) a women of profound wisdom and extreme piety, possessed great administrative ability. Her administration is considered as that of a Model ruler. She was ably assisted by Tukoji Rao Holkar I(1795-97) the commander of her army.
During the reign of Yashwant Rao (1798-1811) the Treaty of Rajpur Ghat was signed with the British in 1805, the first treaty signed between the Holkars and the British. After Malhar Rao II (1811-33) was defeated in the battle of Mahidpur the Treaty of Mandsaur was signed in 1818 which hence forth governed relations between the Holkars and the British, A resident was appointed at Holkar's Court. During the Minority of Tukoji Rao Holkar II (1844-86) the administration was carried on by a Regency Council under the close supervision of the Resident. Tukoji Rao showed aptitude for administration at a young age and was granted full ruling powers in 1852. He could not keep control over his troops during the Rising of 1857 but later helped the British in maintaining order, He was deeply interested in all administrative matters especially land Revenue. 'The Revenue Department is by far the best administered branch of his Government', wrote Colonel Heade in his report for the year 1876-1866.
His son Shivaji Rao Holkar, (1886-1903) was a great builder. The British were not satisfied with his administration. He abdicated in 1903 in favour of his son, Tukoji Rao III (1903-1926) who was invested with full administrative powers in 1911. In 1926 Tukoji Rao III abdicated in favour of his minor son Yashwant Rao II (1926-1948) who was granted ruling powers in 1930. He continued to rule till the transfer of power, when the State of Indore was merged into the erstwhile State of Madhya Bharat on May, 28, 1948.