Ludhiana city was founded in the time of Lodhi dynasty which ruled in Delhi from 1451-1526 A.D. The legend goes that two Lodhi Chief Yusaf Khan and Nihang Khan were deputed by Sikandar Lodhi (1489-1517 A.D.) to restore order in this region. They camped at the site of present city of Ludhiana which was then a village called Mir Hota. Yusaf Khan went across the river Sutlej in Jalandhar Doab to check Khokhars who were plundering the Doab and made a settlement at Sultanpur while Nihang Khan stayed back and founded the present city at the site of village Mir Hota. The new town was originally known as Lodhi-ana, which means the town of Lodi's. The name later changed to the present name Ludhiana.

            This translation from Urdu of a passage of Gulām Sarvar Lāhaurī's (alias Bute Shah) Tarīḵẖ-i maḵẖzan-i Panjāb (History of the Punjab), written in the mid-19th century, is given in the Gazetteer for the Ludhiana District 1888-89: It was originally known as Lodi-Ana (The Lodi's Place) during the Lodi Dynasty under which the city was created. "In the reign of Sikandar, son of Bahlol Lodi, the people about Ludhiana were oppressed by the plundering Baluchis, and applied to the Emperor for assistance. Sikandar, in answer to their prayer, sent two of his Lodi chiefs, by name Yusaf Khan and Nihang Khan, with an army. These chiefs fixed on the present site of the Ludhiana city, which was then a village called Mir Hota. Nihang Khan remained at Mir Hota as the Emperor's Lieutenant; and called the place Ludhiana. He was succeeded by his son a grandson. The latter, Jalal Khan, built the fort of Ludhiana out of the bricks found at Sunet. He saved the town from invaders and treated all its citizen equally. His two sons partitioned the country round about Ludhiana, which was then lying in waste, amongst the people of the town, and distributed them in villages. In the time of Jalal Khan's grandsons, Alu Khan and Khizr Khan, the Lodi dynasty was overthrown by Babar; and the Lodis of Ludhiana sunk to the position of ordinary subjects of the Mughal empire. They are said to have lived close to the fort for many generations, but all traces of them have now disappeared, and even the tombs of Nihang and his immediate descendants have been lost sight of, although they are said to have been standing some years ago."

        The Lodi dynasty lost control of the throne of Delhi in 1526. The Mughals established a strong government at Sirhind, which itself was a sarkar (division) of the Delhi subah (province), and attached Ludhiana as a mahal or parganah.
The century and a half following the death of Akbar (a Mughal emperor) in 1705 was dominated by the rise of Sikhism as a power, and the decline of the Mughal empire. By this time the Mughal empire was tottering to its fall, and various local powers began to assert their independence. The Rais of Raikot who until then had held a considerable tract of land around Ludhiana in lease from the emperors were some of the first to assert their independence. Raja Ala Singh of Patiala, the representative of the crumbling Delhi Sultanate and Rai Kalha II were the principal actors contenders for power in the region. "Rai Kalha III,who appears to have been a ruler of very great ability, extended his power up to Ludhiana. He established independent power over the whole of the Jagraon(the place of the Rais)and the greater part of Ludhiana Tahsils, and a large portion of the Ferozepur District."Khan Bahadur Rai Inayat Khan of Raikot(the custodian of Guru Gobind Singh ji's Ganga Sagar) was the Chief of Rai family at the time of partition of India 1947. Hatur, Chakar, Talwandi Rai in 1478 AD,Halwara and Raikot in 1648 AD and Jagraon in 1680 AD were founded by the Manj Rai family of Raikot and their ancestors-Ref:Ludhiana Dist Gazetteer 1888-89,1904,1935. Chiefs of Punjab 1890,1909,1940., Mahan Kosh p. 311 by Bhai Kahan Singh Nabha.

            In 1741, Ala Singh defeated Rai Kalha III and chased him out of the country, but he soon recovered the territory.
Thinking to take advantage of this power struggle, Nadir Shah invaded, and crossed the Sutlej at Ludhiana, which was then on its banks, and marched through the district along what is now the Grand Trunk Road. Nadir Shah is said to have ordered a general massacre of the inhabitants of Ludhiana on the account of some petty fault, but it seems doubtful that he did.
            His successor, Ahmed Shah Durrani, invaded in 1747. On reaching the Sutlej at Ludhiana, he found his passage opposed by the son of the emperor, Kamardin, with a huge army that had advanced from Sirhind. Durrani avoided the conflict but ended up in direct confrontation with him very near Khanna. While Ahmad Shah Bahadur was defeated, the losses were very heavy on both sides. The subsequent invasions of Ahmad Shah were not resisted by the Mughal troops from Sirhind, but they were constantly harassed by the Phulkian chiefs and the Rais. It was some time about 1760 that the Rais were permitted by Ahmed Shah to take possession of the town of Ludhiana and to extend their power over the country about.

            Although Zain Khan was appointed by Ahmad Shah as Governor of Sirhind in 1761, he was defeated and slain in 1763 by huger armies of Sikhs. They took possession of Sirhind, which they leveled with the ground.
The fall of Sirhind marked the last vestige of Mughal control over the area, and Ludhiana was left in possession of the Rais. The Malaudh Sirdars belonging to the Phulkian stock had already established themselves in the south of Ludhiana in the Jangal villages and the country about Malaudh and Sudha Singh Gill, an adventurer from Loharu in the Ferozepur district, secured a few villages around Sahnewal. In 1767 Ahmed Shah reached Ludhiana on his last expedition but got no further.

            Around 1785, the Sutlej changed in course so that Ludhiana was no longer situated on its banks.
The condition of the country during the latter part of the 18th century was one of considerable prosperity. The rule of the Rais is still spoken of as being very mild; and it is said that they fixed only one-fourth of the produce as their due.
In 1798, Ludhiana was attacked by the Sikhs under Bedi Sahib Singh of Una. At the time, the ruler of the Rais, Rai Alias was a child. His agents Roshan and Gujar made a good stand against the Sikhs at Jodh, ten miles (16 km) southwest of Ludhiana. Roshan was the killed in the fight, and Rai's army was dispersed. However, the Phulkian chiefs, who were on good terms with the Rais, had no intention of allowing the Bedi to establish himself in their midst and came to their aid, driving the invaders out of the villages. Upon the Bedi's siege of Ludhiana, the Rais called in British mercenary George Thomas to help with the defense of the city. On Thomas's approach, Bedi retreated to the other side of the river.
Having recently consolidated the new Sikh Empire, Maharaja Ranjit Singh crossed the Sutlej in 1806 in his first expedition against the Cis-Sutlej states and stripped the Rais of all their possessions, including Ludhiana. The city was occupied but not immediately annexed to the Lahore state.

            By 1809 Ranjit Singh was completing his third expedition and was again on the west bank of the Sutlej ready to attack Ludhiana. Fearing further expansion that was coming closer to their sphere of interest, the East India Company occupied the Cis-Sutlej states east of the Sutlej. The Company sent Colonel David Ochterlony with a force to occupy Ludhiana.

            By the end of 1809, The Treaty with the Rajah of Lahore was signed in which the Rajah agreed to remain north and west of the Sutlej. British troops were permanently stationed in Ludhiana, and they established a cantonment to further consolidate their occupation. Compensation was paid by the British to the Raja of Jind.
In 1835, the Jind family, who technically still ruled Ludhiana, were left without any heirs. By the British doctrine of lapse, Ludhiana came under official control of the East India Company.

            Following the First Afghan War, Ludhiana became the residence of the exiled family of Shah Shuja.
The British cantonment was abandoned in 1854. During the Indian Rebellion of 1857 Deputy-Commissioner Ricketts crushed a rebellion in Ludhiana with the assistance of the chiefs of Nabha and Maler Kotla.

Source :Wikipedia and Local