The Heera Mandi was first called the 'Shahi Mohallah' or Royal Neighborhood in the 17th century. It was called that because many princes and nobles of the Mughal dynasty used to come there. At that time there were only "Tawaifs" (dancing girls) and courtesans there. They were there to amuse the people. During the rule of the Sikh king Ranjit Singh, prostitution [chudhai] also was common. Many brothels were opened there. Ranjit Singh renamed this place 'Heera Mandi'. It was named for an officer, Heera Singh, who lived there. Some historians think that he named it for the beautiful girls (prostitutes) who lived there. They were like precious diamonds.