A warlord is a ruler whose status is based solely on power of violence without any legitimacy (that is: right by law). A warlord is a military commander, usually a militant leader, rebel or militia, who has a private army. The Condottieri of Middle Ages Italy are well known examples. Many warlords lived in China and Mongolia. Warlordism is also known in Afghanistan and Somalia. While feudal lords may have private armies and wage private wars, they are not considered as warlords as their status is based on legitimacy.
Warlords appear when a state collapses. For example feudal lords took over in Europe when the Roman Empire fell. Warlordism is the inevitable consequence of anarchy. Many warlords are former officers, clan leaders, mafia bosses or gang leaders. A warlord may attempt to build a state at the area where he is in power, or he may simply plunder and rob his subjects.
A state which has collapsed into warlordism is in continuous civil war. Such countries have few industries except agriculture, mining and contraband, such as drugs and weapons.