From the end of seventeenth Century up to 1837 A.D. Poonch was ruled by the Muslim Rajas of Loran. It then fell in to the hands of Raja Fiaz Talab Khan of Rahuri. In 1846, this area was handed over to Maharaja Gulab Singh under the treaty of Amritsar. Before this transfer, Poonch was considered a district of Lahore. Maharaja Gulab Singh handed over Poonch and some other areas to his nephews, Jawahar singh and Moti Singh, with the condition that they would not make any administrative changes without the consent of Maharaja of Kashmir. Poonch was annexed and converted in to a Jagir by Maharaja Hari Singh in 1935-36 by the deposing Raja establish their rule in Poonch. In 1947 when Pakistan came in to being, the people of Poonch started on armed struggle afainst the Dogra and Indian Forces.
The political environ had further deteriorated in the State of Jammu & Kashmir after the unanimously passed and adopted resolution on 19th July 1947. This resolution firmly stated that “the state of Jammu and Kashmir should accede to Pakistan for geographic contiguity, religious and cultural reasons and ethnicity. In this meeting it was resolved that all party workers would work in there areas of influence with regards to the spirit of resolution. In Bagh, Sayyed Hussan shah gardezi who was president of Muslim conference of tehsil bagh with the other activists like Syed Khadim Hussain Shah, Secretary Muslim Conference Bagh, Sardar Dost Mohammad Khan and others were assigned the task to actively coordinate and further strengthen the objectives of the party.
During this period Dogra army victimized hundreds of Muslim and burnt several houses of Muslims to ashes. This situation made the activist to organize a clandestine action committee, to launch armed struggle, the only dispensable way to overthrow the problem. On knowing about this action committee, Dogra regime arrested Syed Hussain Shah Gardezi and many others. Section 144 was already imposed on this area and all the activist started violating it. Meanwhile Syed Sadiq Hussain Shah, Aadil Gardezi, Moulana Mazhar Nadvi and Syed Shamshad Hussain decided and worked for organizing a meeting with people at the central place of Bagh and also to hoist Pakistan flag on Bagh fort. This procession while marching towards Bagh was found by hundreds of Muslims and when it reached Neela Butt it had already turned into thousands.
Here under the leadership of Peer Ali Ashghar Shah the procession proceeded towards Bagh where it camped at Huda Bari because the Dogra army has encircled and targeted the whole area. On 26 Aug. 1947 when the grand meeting at Huda bari started the dogra opened fire. It was the time when Peer Ali Ashghar Shah had just stood at the stage to address the people. The first shot pierced to the chest of Qabil Khan a volunteer from Sohawa who was martyred while having raised an unfurled Pakistan’s flag. Approximate 80 people were injured. This cause serious anger throughout the whole state and Muslims of Bagh and Sudhanoti announce armed rebellion as the only solution to the problem.
After the liberation of Bagh, civil order was restored and Peer Ilyyas Shad Qazi Aalim din were appointed as the chief of Bait-ul-mall. Before 1947, Bagh was one of the four Tehsils of the state of Poonch. It was declared as district in 1988, before it was a part of district Poonch.