The Maratha Confederacy was founded and consolidated by Chatrapati Shivaji, a Maratha aristocrat of the Bhonsle clan. However, the credit for making the Marathas formidable power nationally goes to Peshwa (chief minister) Bajirao I. In the early 18th century, under the Peshwas, the Marathas consolidated and ruled over much of South Asia. The Marathas are credited to a large extent for ending Mughal rule in India. In 1737, the Marathas defeated a Mughal army in their capital, in the Battle of Delhi. The Marathas continued their military campaigns against the Mughals, Nizam, Nawab of Bengal and the Durrani Empire to further extend their boundaries. By 1760, the domain of the Marathas stretched across most of the Indian subcontinent. The Marathas even attempted to capture Delhi and discussed putting Vishwasrao Peshwa on the throne there in place of the Mughal emperor.

The Maratha empire at its peak stretched from Tamil Nadu in the south, to Peshawar in the north, and Bengal in the east. The Northwestern expansion of the Marathas was stopped after the Third Battle of Panipat (1761). However, the Maratha authority in the north was re-established within a decade under Peshwa Madhavrao I.

Under Madhavrao I, the strongest knights were granted semi-autonomy, creating a confederacy of United Maratha states under the Gaekwads of Baroda, the Holkars of Indore and Malwa, the Scindias of Gwalior and Ujjain, the Bhonsales of Nagpur and the Puars of Dhar and Dewas. In 1775, the East India Company intervened in a Peshwa family succession struggle in Pune, which led to the First Anglo-Maratha War, resulting in a Maratha victory. The Marathas remained a major power in India until their defeat in the Second and Third Anglo-Maratha Wars (1805–1818), which resulted in the East India Company controlling most of India.