Societal Impact StatementDebates about the impacts of human settlement on Madagascar's habitat have missed the Malagasy perspective. Using indigenous and local knowledge in the form of toponyms, we find many regions across today's treeless grasslands are named after forest/trees, suggesting they may be novel. Where observed habitat does not match toponyms, erosion is significantly more likely at landscape scales. This suggests rapid expansion of erosion following human removal and burning of endemic forest, savanna woodland, heathland and grass assemblages. Findings also provide a timely warning: current practices may be unsustainable and may impact not only biodiversity but also human wellbeing unless urgently addressed.Summary The debate surrounding the extent of Madagascar's treeless grasslands at human settlement is important because introduced disturbance can negatively impact the biodiversity and productivity of systems that evolved under different regimes. Indigenous and local knowledge (ILK), often overlooked, can provide information about past vegetation structure. To test whether clearance of forest and trees, frequent fires and pasture preparation have accelerated today's island‐wide erosion, we use vegetation toponyms and assess whether mismatches between these and current vegetation types are significantly more likely to be associated with erosion. Using Malagasy and Imerina linguistic records spanning 150 years, we mapped forest‐related and grassland‐related extensive toponyms in current grassland and forest, respectively. We then assessed whether remotely‐sensed erosion was more likely when toponyms and current habitat did not match. We found 316 sites in treeless grasslands, named after forest/clusters of trees, but no grassland‐named sites in forest. Globally, natural forest and grasslands both constrain erosion. Forest toponyms in grassland were significantly more likely to reflect erosion than sites in extant forest. These findings concur with palaeoecological, geomorphological, molecular and rangeland palatability studies. Malagasy ILK, hitherto largely ignored as a source of information, strongly suggests vegetation clearance and human disturbance have exacerbated the degradation of terrestrial, freshwater and marine ecosystems through topsoil loss and siltation and selected fire‐adapted, less‐palatable grasslands. Malagasy ILK in the form of toponyms highlights the need to address the negative impacts of burning and land‐clearance practices (e.g., loss of biodiversity and ecological function, decreased agricultural productivity, collapsed fisheries), given island‐wide challenges to food security and conservation.