It is a Hindustani term, used in Urdu, Hindi, Bengali and many other North-Indian languages, borrowed via Persian from the Arabic, being the honorific plural of naib, or "deputy." In some areas, especially Bengal, the term is pronounced nobab. This later variation has also entered English and other foreign languages as nabob.
The term "Nawaab" is often used to refer to any Muslim ruler in north or south India while the term "nizam" is preferred for a senior official—it literally means "governor of region". The Nizam of Hyderabad had several nawabs under him: Nawabs of Cuddapah, Sira, Rajahmundry, Kurnool, Chicacole, et al. "Nizam" was his personal title, awarded by the Mughal Government and based on the term "Nazim" as meaning "senior officer". "Nazim" is still used for a district collector in many parts of India. The term "nawab" is still technically imprecise, as the title was also awarded to Hindus and Sikhs, as well, and large zamindars and not necessarily to all Muslim rulers. With the decline of that empire, the title, and the powers that went with it, became hereditary in the ruling families in the various provinces.
Under later British rule, nawabs continued to rule various princely states of Awadh, Amb, Bahawalpur, Balasinor, Baoni, Banganapalle, Bhopal, Cambay, Jaora, Junagadh, Kurnool (the main city of Deccan), Kurwai, Mamdot, Multan, Palanpur, Pataudi, Radhanpur, Rampur, Malerkotla, Sachin, Rajoli and Tonk. Other former rulers bearing the title, such as the nawabs of Bengal and Oudh, had been dispossessed by the British or others by the time the Mughal dynasty finally ended in 1857.
Some princes became Nawab by promotion, e.g. the ruler of Palanpur was "diwan" until 1910, then "nawab sahib". Other nawabs were promoted are restyled to another princely style, or to and back, e.g. in Rajgarh a single rawat (rajah) went by nawab.
The style for a nawab's queen is begum. Most of the nawab dynasties were male primogenitures, although several ruling Begums of Bhopal were a notable exception.
Before the incorporation of the Subcontinent into the British Empire, nawabs ruled the kingdoms of Awadh (or Oudh, encouraged by the British to shed the Mughal suzerainty and assume the imperial style of Badshah), Bengal, Arcot and Bhopal.