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With the increase of energy demand, the scale of power grid is expanding, and the difficulty of power grid fault diagnosis is increasing. Aiming at the problem of large power grid fault diagnosis, a method of partition fault diagnosis based on improved Probabilistic neural network (PNN) and gray relational analysis (GRA) integral is proposed. Firstly, the large power grid divided into small areas for fault diagnosis through power grid partition, which reduces the difficulty of fault diagnosis. Then the PNN diagnosis module is established by the PNN optimized by GA‐CPSO for diagnosing the power grid fault. Finally, the faults in the overlapping area are reanalyzed by the GRA method, in order to realize the accurate fault diagnosis of the whole power grid. The feasibility and effectiveness of the method are analyzed by two cases. The diagnosis results show that the method can effectively identify the faults in the nonoverlapping area and the overlapping area, and has strong fault tolerance and high diagnosis accuracy. © 2020 Institute of Electrical Engineers of Japan. Published by Wiley Periodicals LLC. [ABSTRACT FROM AUTHOR]