The history of Indore is inextricably linked to the rise of the Maratha Empire and the Holkar dynasty, which transformed a small settlement into a thriving centre of power and trade. Although a settlement at the confluence of the Khan and Saraswati rivers had existed for centuries, serving as a stopover for pilgrims, its modern history begins in the 18th century. The key figure in the city's establishment was Malhar Rao Holkar, a Maratha military commander. In 1733, he was granted these lands by the Peshwa (Prime Minister) and established a military camp here. The status of the capital was definitively secured for Indore under Malhar Rao's daughter-in-law, the distinguished ruler Ahilyabai Holkar, who reigned from 1767 to 1795.
The rise of Indore was driven by several factors. Firstly, the city became the capital of the powerful Holkar State, one of the key states in the Maratha Confederacy, which provided it with stability and resources for growth. Secondly, its strategic location in the fertile Malwa region made Indore an important point on trade routes. After the Third Anglo-Maratha War in 1818, the state became a protectorate of British India, which, despite the loss of political independence, contributed to further economic development.
Under the rule of the Holkar dynasty, Indore evolved into a significant economic and cultural hub. In the 19th century, the city grew rapidly thanks to the cotton and opium trade. The rulers, particularly Ahilyabai Holkar, were actively involved in the construction of temples and palaces, shaping the city's unique architectural appearance, which combined Maratha, Mughal, and European styles. The magnificent Rajwada Palace, founded by Malhar Rao Holkar back in 1747, became the symbol of the dynasty's power and prosperity.