The word 'Peshwa' was derived from Persia connoting "foremost" and this was introduced in Deccan by the Muslim rulers. The first Peshwa, Moropant Trimbak Pingle, was appointed by Chhatrapati Shivaji, the founder of the Maratha Empire, during his reigning period. As per historical evidence, Peshwa Sonopant Dabir was appointed by Shahji to assist Shivaji. The Peshwa was given the power of a Prime Minister.
The first Peshwas to receive the status of king was eight or nine years prior to 1700 AD. They oversaw the greatest expansion of the Maratha Empire around 1760 with the help of Sardars (Generals) like Holkar, Shinde, Bhonsale, Pantprainidhi, Gaekwads, Panse, Vinchurkar, Pethe, Raste, Phadke, Patwardhan, Pawar, Pandit and Purandare.
Ramchandra Neelkanth Bahutkar, alias Ramchandra Pant Amatya Bawadekar, was the youngest member of the council of ministers of Chhatrapati Shivaji. He also worked as a senior minister for Chhatrapati Sambhaji, Rajaram and Sambhaji II and during 1689-1699 he received the status of a king from Chhatrapati Rajaram as "Hukumatpanha". He was one of the greatest diplomats, administrators and warriors of the Maratha Empire and wrote the famous code of civil and military administration 'Adnyapatra'. This eminent Peshwa recaptured many forts from Mughals during 1690-1694 and in some cases he applied the guerilla war techniques. He received immense support from the great Maratha warriors, Santaji Ghorpade and Dhanaji Jadhav for accomplishing his ministerial duties. Sometimes he himself took active part in the wars during 1689-1695 and in the absence of Chatrapati Rajaram; he sometimes played the role of shadow king. After Ramchandra Neelkanth Bahutkar, Tarabai was appointed to the post of the Peshwa.
The Bhat family of Shrivardhan in the Konkan region was also assigned to keep the post of the Peshwas. During the reigning period of Chhatrapati Shahu, Balaji Vishwanath Bhat was appointed as the Peshwa in 1713 AD. After the appointment of Baji Rao I by Shahu in 1719, the position of the Peshwas became hereditary in the Bhat family. This led to a rebellion by General Trimbak Rao Dabhade, the Senapati (commander in chief). Trimbak was killed at the Battle of Bilhapur on April 1, 1731. After this incident, the Peshwas and the Bhat family were given the unchallenged control over Maratha. Baji Rao's son was also appointed as Peshwa in 1740 AD by Shahu. The Peshwas were given considerable authority to command the Maratha armies. Shahu made the Peshwas his successors at the time of his demise in 1749. Since then Peshwa became the head of Maratha Empire. The Peshwas called the descendants of Shivaji who persisted as the supposed Raja of Satara, 'Swami' that connotes 'the real Owner' in Marathi. After the demise of Madhav Rao and the battle of Panipat, the Peshwa became a ceremonial head of state. Thereafter, the Peshwas earned the epithet of titular and the successors were Narayan Rao, Baji Rao, Raghunath Rao, Sawai Madhava Rao II Narayan, Chimnajee Madhava Rao, Baji Rao II, Amrit Rao (brother of Baji Rao II), Nana Sahib et al. The then generals and diplomats of the Peshwas were Ranoji Scindia, Malhar Rao Holkar, Udaji Pawar, Govind Pant Bundele, Pilaji Jadhav, Pilaji Gaekwad, Visaji Krushna Biniwale, Nana Phadnis, Mahadji Shinde and others.
In 1689 Ramchandra Pant Amatya Bawdekar, the Peshwa, received the status of a king by Chatrapati Rajaram. The first Peshwa from the Bhat family was Balaji Vishwanath Bhat who was a chitpavan Brahmin. He was the first Peshwa of the Maratha confederacy. He made the office of Peshwa hereditary. He was a shrewd diplomat apart from being a military general and under him the Maratha from a microscopic minority, rose into great power. His son Baji Rao I succeeded him. He was also a military general and a diplomat like his father. He liberated the revenue provinces of the Maratha power the Mughal supremacy ands also extended the Maratha supremacy in the Deccan. Under Baji Rao I, Gujrat, Malwa, the territory of Bundelkhand came under Maratha supremacy. Baji Rao II, the last Peshwa was defeated by the British East India Company in the Battle of Khadki which was a part of Third Anglo-Maratha War (1817-1818). The British East India Company annexed the territory of Peshwa in Central Maharashtra in their Bombay province.
The Peshwa tradition was one of the most important changes in the Maratha Empire and it had a great effect on the extension of the Maratha province.