After the death of Aurangzeb, the increase in Maratha influence further weakened the Mughal rule. The founder of the house of Gwalior was Ranoji Sindhia, commander of the Peshwa's forces. He was authorised to collect an equal share of the taxes from Malwa along with the Holkars. The Peshwa granted the power to administer Malwa to Sindhia and Holkar and gave them the Royal seal on 2 November, 1731. The defeat of the Marathas in the Battlle of Panipat in 1761 dealt a heavy blow to them. Mahadji Sindhia escaped from the battlefield and took control of Gwalior fort.
His successor Daulat Rao Sindhia (1794-1827) Jankoji Rao Sindhia (1827-43) Jayaji Rao Sindhia (1843-1886) ruled over Gwalior. After his death in 1886 his minor son Madho Rao Sindhia succeeded him. A Council of Regency was appointed to work till 1894. Madho Rao Sindhia assumed full administrative powers on 15 December, 1894. The state made great progress during his reign. General Assembly (Upper House) and Law Asssembly (Lower House) were set up to assist in administration. Many industries were also established.
Madho Rao Sindhia died in 1925 and was succeeded by his nine year old son Jivaji Rao Sindhia. A Council of Regency was set up, headed by his mother, to run the administration. He assumed power on 2 November 1936. Political awakening increased during his reign. India gained independence on 15 August, 1947 and Maharaja Sindhia signed the Instrument of Accession.
Twenty five states of Central India were merged to form Gwalior, Indore and Malwa Union and it was named Madhya Bharat. Pandit Jawaharlal Nehru inaugurated Madhya Bharat on 25 May, 1948. Maharaja Sindhia was made Raj Pramukh and the Ruler of Indore was made the Deputy Raj Pramukh. Gwalior was the capital for seven months and Indore for five months. This arragnement continued till 1956 when the states were re-organised and Madhya Pradesh came into existence. Gwalior became a part of this State.