Shergarh is supposed to have been named after its capture by Shershah of the Sur dynasty in course of his Malwa campaign. The ancient name of this town was Kosavardhana, “the increaser of treasury”. Being a place of strategic importance, Shergarh was ruled by different dynasties from early times. An inscription found here refers to Samanta Devadatta who ruled in CE. 790 and built a Buddhist temple and monastery here. Hindu rulers patronized Buddhism, Saivism and Jainism. The temple of Somnatha was the principal place of worship in the tenth-eleventh century CE. The Lakshminarayana Temple, consisting of asanctum, antarala, mahamandapa and ardhamandapa is well preserved and is assignable to the eleventh century CE. An inscription in this temple narrates the genealogy of the Paramara kings of Dhar from Vakpati to Naravarman. An inscription of CE. 1228 records that a devotee of Siva built here a water-house. It is notified vide Act No. LXXI of 1951 dated 28.11.1951.