Theoretical investigations on electrorheological (ER) fluids usually rely on computer simulations. An initial approach for these studies would be the point-dipole (PD) approximation, which is known to err considerably when the particles approach and finally touch each other due to many-body and multipolar interactions. Thus various works have attempted to go beyond the PD model. Being beyond the PD model, previous attempts have been restricted to either local-field effects only or multipolar effects only, but not both. For instance, we recently proposed a dipoleinduced-dipole (DID) model which is shown to be both more accurate than the PD model and easy to use. This work is necessary because the many-body (local-field) effect is included to put forth the many-body DID model. The results show that the multipolar interactions can indeed be dominant over the dipole interaction, while the local-field effect may yield a correction.