Sailana princely state was a part of Malwa Agency, Central Indian Agency. It had an area of 450 square miles. The word ‘Sailana’ is traced from the name of Shaila hills. Its territories were scattered and intermingled with Ratlam state and so it was tedious for cartographer to make accurate map of Sailana. Its boundaries intermingled with Gwalior, Indore, Dhar, Jhabua, Jaora, Banswara and Kushalgarh. The chief river of the state was Mahi which flows in the western part of the State.
The lineage of Sailana comes from Rathore Rajputs of the Ratanavat branch, an offshoot of the Ratlam house. Jai Singh, the great grandson of Ratan Singh established the state. Ratan Singh was responsible for the foundation of Ratlam state. In 1716, he fought a battle at Sagode against his uncle for the murder of his father. He secured Ratlam and kept it for his elder brother. The existing state and conquered state was divided among both the brothers. Raoti town was made the capital of the state. Later, in 1736 he shifted capital to the newly built Sailana city. He fought 22 battles and turned Sailana into an independent state.
During Raja Mokham Singh, eastern and southern parts of the state were annexed by the Scindias of Gwalior. The next ruler Lakshman Singh tried to push back Scindia from his kingdom. In 1818, he refused to pay chauth tax which was paid regularly by earlier rulers. This made Scindia angry and they sent armies under Bujang Rao with European arms. But they were defeated by Lakshman Singh and captured soldiers were allowed to leave but all their arms were taken away by him.
British officer, John Malcolm tried to settle the problem between Gwalior and Sailana on 5th January 1819. This settlement concluded by providing protection to Sailana from the British and to pay a fixed amount as tribute of 42,000 Salim Sahi to Gwalior. Raja Jaswant Singh and his son Dileep Singh brought many reforms in the field of education, medical aids, municipality, judiciary and executives. Dileep Singh signed the accession of the Indian Union on 15th June 1948.