The town owes its name to Farid-ud-din Khan, an officer in the court of Mughal Emperor Akbar. The emperor gave away this town as a Jagir or an estate as a reward for his loyalty. The jagir covering seventeen villages was situated between Pilkhua and Begmabad.
Faridnagar used to be a garrison town, a kind of military post for Mughal army comprising mainly Baloch soldiers. It was also a home to a mint or taksal that manufactured coins during the period of Akbar and his son Jahangir.
A residential locality in the town, called Garhi Ballochan, housed the Balloch soldiers and their families. Its entrance is guarded by an iron gate. Close to Garhi Balochan is a beautiful mosque named Jama Masjid. Faridnagar was a flourishing town during the reign of Akbar.