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Titles Recognized, and Regularly Conferred by Her Majesty Through the Government of India.
In British India there was a well-established order and gradation of nobility; in which creations and promotions were made by Her Majesty's representative, the Viceroy. In the higher ranks of this nobility, an additional step or grade in each rank was made by the custom of making the creation or promotion in some cases personal, in others hereditary. But no rank below that of Rájá for Hindus, or Nawáb for Mohammedans, was created hereditary.

Rai (or Rao in Southern and Western India) for Hindus, and Khán for Mohammedans, were the first or least considerable titles conferred by the British Government. These, with or without the affix of Saheb, which added to the dignity, were very commonly ex officio titles, held by the subordinate officers of civil departments. Next above Rai Saheb, Rao Saheb, or Khán Saheb comes the title Rai Bahádur, Rao Bahadur, or Khán Bahádur; and this was the title which was usually first conferred on Indian gentlemen who had distinguished themselves by their munificence, by their patriotism, or in any other way. Rai Bahádur was commonly used as the Hindu title in the Bengal Presidency, Rao Bahádur as that in the west and south of India, and Khán Bahádur for Mohammedans and Persis; and this rank seems exactly analogous to that of Knight Bachelor in England.

Above this rank was the title of Rájá (with the feminine Ráni) for Hindus, Nawáb (with the feminine Begam) for Mohammedans; and this may be hereditary or personal. Next higher was a Rájá Bahádur, or a Nawáb Bahádur. Higher again, for Hindus, was the title of Mahárájá, and above that was Mahárájá Bahádur. It was one of the many anomalies of the Indian system, that there do not seem to be any Mohammedan analogies to the last two highest Hindu titles, so that a Nawáb Bahádur may be the equal either of a Rájá Bahádur, or of a Mahárájá Bahádur, according to circumstance. These seem to be very analogous to the various steps in the British Peerage.

Persis share with Mohammedans their lower titles. But where they have attained to higher rank than Khán Bahádur, it has been indicated by appointment to one of the Military Orders, or by the conferment of British Knighthood, or (in two cases) by a British Baronetcy.

The ordinary sequence of rank, then, in the aristocracy of British India, was indicated as ::
Hindus Mohammedans
Mahárájá Bahádur Nawáb Bahádur
Mahárájá Nawáb
Rájá Bahádur Khán Bahádur
Rájá Khán Saheb
Rai (or Rao) Bahádur Khán
Rai (or Rao) Saheb
Rai (or Rao)

The eldest son of a Mahárájá or Rájá was called a Maharajkumár (or Maharajkunwár), or Rájkumár (or Rajkunwár), or simply Kumár (or Kunwár); and these titles had in some cases been formally conferred by the Government. Nawábzáda, or Mián, was the title given to the sons of Nawábs. Among the Barons of the Punjab there was a remarkable uniformity of title; they were nearly all styled Sardár or Sardár Bahádur - and their sons were often styled Mián, though this was also an independent title, as was Dewán also, in the Punjab. In Oudh and in the Central Provinces, on the other hand, there was the greatest diversity in the form of the territorial titles Thákur being the commonest title, but Rai was also frequent (and of far higher dignity than it seemed to bear in some other Provinces), and so were Rájá, Dewán, and Rao.

References :
  • The golden book of India - By Sir Roper Lethbridge (1840-1919)