Maseru was founded by the British as a small police camp in 1869, following the conclusion of the Free State–Basotho Wars when Basutoland became a British protectorate. Maseru is located at the edge of the "conquered territories" relinquished to the Orange Free State (now the Free State province of South Africa) as part of the peace terms. It was located west of Basotho King Moshoeshoe I's stronghold of Thaba Bosiu, the previous "de facto" capital. A bustling market town soon grew around the area.