It was suggested I post here. I have to say it's pretty outside of my location and timeframe. Most of my reading is centered around Buddhism and what I know about India that's not political in nature is mostly centered around Buddhism. Even the concepts I know of Hinduism are usually through a Buddhist lens.

What I do know about the development I also can't provide a source. I studied at the Royal Thimphu College and once sat down with a Bengali professor who explained her own dissertation to me about the development of the Varna system in India, which ended up being a primer on "Brahmanism." (Which then led to a long discussion on the inaccuracy of the term "Hinduism" which was developed post-independence as a response to the development of Pakistan for Muslims, India for Hindus. When I presented the irony that "India" and "Hindu" both stem from the "Indus River" which is currently in Pakistan, Runa, aforementioned professor, winked at me and said "Exactly. Hindus are political, Brahmanists are religious." The logic being that Brahmanists derive religious authority from the Brahmin Varna, just as Christians derive religious authority from Christ, and Muslims from submission to God.)

Anyway, I'll just point out some of the books that have helped me in understanding this complex religion and maybe you can go on with your search from there.

Originally I was interested in Wendy Doniger's The Hindus: An Alternative History but found out it was full of selective information and skewed perspectives. I was more interested in a general history of India and fell upon John Keay's India: A History which he describes as "A historiography of India as well as a history." And he does go over developments of Brahmanism threaded with the rise and fall of conquerors through the region.

My introduction to Brahmanism (though he DOES refer to it as Hinduism) was Huston Smith's The World's Religions which doesn't go over the history as much of any of the religions, but is a nice starting point, especially when comparing say Buddhism with Brahmanism, which most people regularly do. It's also a good outliner for the different Brahmanist traditions (or at least the major trends in Brahmanism).

Finally, probably the most accurate to your original question though it has a broader focus and a point to make, Karen Armstrong's *The Great Transformation remains one of my favorite books on the Axial Age in which she covers the religious shifts that occurred more or less simultaneously in Greece, the Levant, India, and China. Of interest to you would be the Vedic response to the growth of Buddhism and Jainism, the development of the Mahabharata, and the changing understandings of the Vedas and Upanishads. It's a pretty great book, and Karen Armstrong can of course lead you further down the path of Indian religious history.

Hope that helps at all.

http://www.reddit.com/r/AskHistorians/wiki/books/southasia#wiki_india

A couple of the books seem to do a good job explaining this. I'm not an expert (don't hate me mods i'm referring to sub links not posting something independent) but Thapar's book which is included in the links does a really good job explaining the development of Hinduism and the Vedic religions. I read an older version of it but the one I read did a good job of explaining the evolution of Hinduism over time though that was in the context of the general history rather than as a specific book just on Hinduism.

Ancient India: from the Origins to AD 1300 by Romila Thapar (2002). An authority on the subject, and widely used in Indian universities.

and I'd assume the new Cambridge series would have good authoratative works on the evolution of Indian religions.