At the southern periphery of the Mughal empire, the rise of the Bahmani kingdoms and Vijayanagara empire, the Marathas and the Nizam of Hyderabad contributed to urban development. Pune, Golconda, Hyderabad, Bijapur and Aurangabad are urban centres of this period.

It is reported that apart from the capital and administrative towns, the smaller towns were created by the Mughal emperors who were aware of the enormous cultural gap between the rural masses and the city rulers. They dispersed intermediate functionaries in different parts of the empire who helped in the process of land resettlement and building small towns. These places were noted for their craftsmen and large houses of nobles.