Gautamabai was born on 16 June 1694 to Bhojraj Baba Bargal, a wealthy landlord from Talode, and his wife Mohini Bai.
Her future husband, Malhar Rao Holkar, was the son of her paternal aunt and spent his childhood at her family’s residence.
She was a devoted disciple of Shore Bhramendra Swami, the guru of Bajirao I, and played a crucial role in guiding Malhar Rao Holkar in administrative and military affairs.
During Malhar Rao’s frequent absences due to military campaigns, Gautamabai managed state affairs and inspired her husband in his endeavors.
In 1754, after the death of her son in Khumbher, she played a key role in preventing her daughter-in-law, Ahilyabai Holkar, from committing sati.
Under her administration, the estate included key regions such as Maheshwar, Choli, Indore, Harsola, Depalpur, Madhya Pradesh, Mahidpur, Barloi, Jagoti, Makdone, Chandwad, Ambad and others.
Gautamabai's agricultural practices were significant, with her lands producing various crops, including opium flowers.
The Khasgi Jagir also contributed to religious and cultural practices, including the installation of the Devi of Mankeshwar temple and Gargya's Sawa in Wafgaon.
In 1759, her Khasgi Jagir was inherited by her daughter-in-law, Ahilyabai Holkar, with a staggering amount of 15 crores.
The town was founded by Gautama Bai, the wife of Malhar Rao Holkar (1731–1766), and thus named after her.
The town features notable architectural and civic elements, including: The aftermath of the Third Battle of Panipat in 1761 profoundly impacted the Holkar family.