The Puar Rajputs, the ancestors of the last ruling family, were established in Dhar long before the Christian era. The celebrated Rajas Vikramaditya and Bhoj are said to have reigned in Dhar. Vikramaditya transferred his capital from Ujjain to Dhar. The present Dhar dynasty was founded in 1729 by Udaji Rao Panwar a distinguished soldier who received the territory as a grant from Peshwas. During the Pindhari raids, the state's territory was whittled away until it was restored in size in 1819 when it was taken under protection by the British. The name of the state was taken from old city of Dharlong famous as the capital of Parampara Rajputs. The state was confiscated for rebellion in 1857 but was restored in 1864 with the usual reduction in territory.