The complexities and challenges for reliable operation of power system have increased due to various types of Distributed Generators (DG) in the Distribution Network (DN) to supply the increasing load demand. It necessitates a comprehensive approach in planning the system towards effective and reliable operation of the system. During the operation of the system, detection of unintentional islanding is critical as non-detection of islanding event could lead to cascaded failure of the system due to active or reactive power imbalance leading to frequency, angle or voltage instability. If undetected, the instability in the islanded part can cascade into the stable part of the system resulting in complete failure of the system. A robust Modified Islanding Detection Technique (MIDT) has been proposed for identifying the islanding event early and accurately in the distribution networks with DGs installed for multiple objectives and is compared with existing passive Islanding Detection Techniques (IDT). A rank-based load shedding scheme is proposed for stable and reliable operation of the identified island, which sheds only the most vulnerable loads in the island for regaining the frequency and voltage stabilities. The proposed MIDT and rank based load shedding schemes were tested on 11kV IEEE 118 Bus Test system.