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Constitutional theory defines a timocracy as either:

1. a state where only property owners may participate in government; or
2. a government where rulers are selected and perpetuated based on the degree of honour they hold relative to others in their society, peers and the ruling class.

The word derives from the Greek words timo / τιμή , meaning "honour" or "worth", and -kratia meaning "rule" (as in government).

Solon introduced the ideas of timokratia as a graded oligarchy in his Solonian Constitution for Athens (early 6th century BC). His, the first known deliberately-implemented form of timocracy, allotted political rights and economic responsibilities depending on membership of one of four tiers of the population. Solon defined these tiers by measuring how many bushels of produce each man could produce in a year, namely:

• Pentakosiomedimnoi ("500-bushel men", those who produced 500 bushels of produce per year)
• Hippeis (knights, those who could equip themselves and one cavalry horse for war, valued at 300 bushels per year)
• Zeugitai (tillers, owners of at least one pair of beasts of burden, valued at 200 bushels per year)
• Thetes (manual laborers)

N.G.L. Hammond supposes that Solon instituted a graduated tax upon the upper classes, levied in a ratio of 6:3:1, with the lowest class of thetes paying nothing in taxes but remaining ineligible for elected office.

Aristotle later wrote in his Nicomachean Ethics (Book 8, Chapter 10) about three "true political forms" for a state, each of which could appear in corrupt form, becoming one of three negative forms. Aristotle describes timocracy in the sense of rule by property-owners: it comprised one of his true political forms. Aristotelian timocracy approximated to the constitution of Athens, although Athens exemplified the corrupted version of this form, described as democracy.

Plato produced the earliest surviving text using the term in the rule-by-honour sense. In The Republic, he describes four forms of unjust state, with timocracy as the preferable of the four and closest to the ideal society. The city-state of Sparta provided Plato with a real-world model for this form of government. (Modern observers might describe Sparta as a totalitarian or one-party state, although much of the detail we know of its society comes from Sparta's enemies.) The idea of militarism often attaches to the honour-oriented timocracy.

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