Holkar, the family name of the Maratha rulers of Indore, was adopted as a dynastic title. The family was of peasant origin and of shepherd caste. It is said to have migrated from the Mathura district of Uttar Pradesh to the village of Hol about 65 km. from Pune in Maharashtra. The name of this village coupled with the Maratha terminal kar (meaning: an inhabitant of) provided a surname used by all members of the family.

The founder of the dynasty was Malhar Rao Holkar (1694-1766), who rose from peasant origins by his own ability. In 1724, the Peshwa at Pune,delighted by his soldierly prowess, gave him command of 500 horseback soldiers and appointed him as the Peshwa's chief general in the Malwa with headquarters at Indore. He was given the previlege of flying a triangular red and white stripped flag which later became the ensign of the Holkar house. In 1733, Peshwa gifted him the Indore area, thereby catapulting him to the ownership of a vast domain stretching from the Deccan to the Malwa table land. He gradually became independent of the Peshwa central rule and by the time of his death, he was the de facto ruler of Malwa.

After his death, as his son had died before him (killed by a cannon ball), he was succeeded by his daughter-in-law Ahilya Bai Holkar. She ruled from 1767 to 1795 with great skill and understanding. She governed the state from a palace fort at Maheshwar on the northern bank of the Narmada river. Sir John Malcolm, in his memoirs of Central India described her as a "female without vanity... excercising in the more active and able manner, despotic power with sweet humanity...". Though Ahilyabai never stayed in Indore, it is in her reign that Indore grew up into a city. Indore was an island of prosperity in a sea of voilence. Her rule became proverbial for justice and wisdom. She was the rare Indian royalty to be deified in her life time. She contributed a lot to the heritage of India by establishing several religious edifices remarkable in architecture. The Kashi Vishweswar temple at Varanasi being notable among them. Her unique pan-indian look is reflected in the fact that she built Dharmashalas at Badrinath in the north and Rameshwaram in the south, established Anna Chhatras at Dwarka in the west, Jagannathpuri in the east, and at Omkareshwar and Ujjain in central India. She also establishes charitable institutions at Gaya, Varanasi, Ayodhya, Prayag (Allahabad), Haridwar and Pandharpur. She was at heart a queen of whole India rather than that of the Holkar kingdom. She died at Maheshwar where a large mousoleum stands in her memory.

The commander of her forces was Tukoji Rao Holkar, of the same clan but no near relation. On his death in 1797 power was seized by Tukoji's son Jaswant Rao.

Jaswant Rao Holkar was a brilliant guerilla leader. After the defeat of Scindias (of Gwalior) in 1803, he took on the British forces and defeated Col. William Monson and beseiged Delhi. He was however, defeated by Gen. Gerard (Lord) Lake at Dig and Farrukhabad in november of 1804, and was compelled to make peace a year later. Soon after, he became insane and died in 1811.

In 1818, Holkars became a part of British India empire, when the British under Sir John Malcolm defeated the Holkars at Mahidpur. Indore now became the official capital of the Holkar kingdom with a British Resident stationed at Indore.

Indore was a participant in the Indian War of Independence of 1857. The then British resident at Indore - Colonel Henry Durand had brushed away any possibility of uprising insisting that "there was not a ripple to break the calm which reigned in Central India". At eight o'clock on 1st July 1857, mutiny began. Thirty-nine English subjects were killed and the Resident managed to escape. Indore was retaken by the British after a few months and Saadat Khan, who led the mutiny, was tried and sentenced to death.

The last four Holkar rulers are often called the Makers of Modern Indore.

• Tukoji Rao II (1844-1886) installed the first railway line from Khandwa to Indore . He also built the M.T.H. Hospital, Kila (now a Girls Degree College), Shiv Vilas Palace and began the construction of the Lal Baugh Palace.
  

• Shivaji Rao Holkar (1886-1903) was specially known for his love for architecture. Among the many to his credit is the Holkar Science College which has completed more than 100 years.
  

• Tukoji Rao III (1903-1926) gave the city the High Court, Gandhi Hall, Moti Bunglow and Yeshwant Niwas Palace.
  

• Yeshwant Rao Holkar (1926-1947) gave to Indore the famous six storied Maharaja Yeshwant Hospital.
  

Till 1947, when India became independent, Indore was a princely state. After independence, Indore state joined Dominion of India along with hundreds of other princely states. The Holkar dynsty as rulers of Indore formally came to an end when former Prime Minister Indira Gandhi abolished the state pension of all the ex-ruler families. Even now, the Holika (firewood burnt of the eve of Holi festival) in front of Rajbada is lit by members of Holkar family.

Source: Encyclopaedia Britannica, "HOLKAR".