Nanocrystalline Ag-doped indium oxide (AIO) thin films, by employing a much simplified spray pyrolysis technique in different substrate temperatures (300, 350, 400 and 450$\deg$ C), were fabricated for the first time. The deposited films were subjected to various characterization studies, to explore certain features like the influence of various deposition temperatures on physical and antibacterial properties. XRD results showed that all the samples exhibited preferential orientation along the (2 2 2) plane. The variation in the crystalline size with increasing substrate temperature was explained on the basis of the Zener pinning effect. The electrical sheet resistance ($R_{sh}$) was found to decrease sharply with increasing substrate temperature and attained a minimum value (62$\Omega$/$\square$) at 400$\deg$C and then started increasing for higher deposition temperatures. Further, PL emission spectra of the samples in the visible range ascertained the possibility of applicability of the same in nanoscale optoelectronic devices. From the studies, it was found that at 400.C deposition temperature, one could expect better antibacterial efficiency against {\it Escherichia coli}. The influence of the shape and size of AIO nanograins on the antibacterial activity was analysed using scanning electron microscopy images.