The city was founded at the close of the 15th century and named after Nawab Ghazi Khan Mirani, son of Nawab Haji Khan Mirani, a Balochi chieftain, who had declared independence from the Langah Dynasty's Sultans of Multan. Together with two other "Deras" i.e. settlements, Dera Ismail Khan and Dera Fateh Khan, it gave its name to Derajat. Derajat eventually came into the possession of the British after the Sikh War in 1849 and was divided into two districts: Dera Ghazi Khan and Dera Ismail Khan. After the independence, many of the city's Hindu residents settled in Derawal Nagar colony of Delhi, India. The district of Rajanpur was later carved out of the Dera Ghazi Khan district.