Nawab is an Urdu title, derived from the Arabic "naib". It is the honorific plural of naib meaning 'deputy'. In some areas, especially Bengal, the term is pronounced Nabob. This later variation has entered the English and other foreign languages. It was a term originally used to refer to the "subedar" or provincial governor or viceroy of a subah (province) or region in the days of the Mughal empire. But during Mughal times, it became a high title for Muslim and other nobles.
Since most of the Muslim rulers of the subcontinent had, like most otherwise titled Hindu (Maha)rajas and other princely states, accepted the authority of the Mughals at the height of this empire the term Nawab was often used to refer to any Muslim ruler in the subcontinent.
This is technically imprecise, as the title was also awarded to non-Muslims. With the decline of the Moghul empire the title, and the powers that went with it, became hereditary in the ruling families of the various provinces.
As the power of the Mughals declined, this title was also used by some Sikh leaders such as Nawab Kapur Singh, etc.
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