According to Arabic lexicographers it means those countries, which are either presently or previously ruled by the Islamic ruler. Darul harb means Non-Muslim country.
In 1298 AH (1888 AD), when Imam Ahmad Raza (R.) were only 14 years old, one Mr Mirza Ali Baig from Badayun (UP, India) submitted an inquiry application asking whether India is Darul Islam or Darul harb. In reply Imam Ahmad Raza (R.) issued fatva that: India is Darul Islam, because Darul harb is that country where Islamic  laws and conventions cannot be promulgated. As such conditions do not exist in India therefore it is Darul Islam.