In deregulation of power system, different regulatory units, environmental concerns and economic concerns have lead to the penetration of Distributed Generation (DG) in power system. When DGs are penetrated, various parameters like DG technology, optimal size, optimal location, and its impact on various operating characteristics such electrical losses, voltage profile, stability and reliability of power system are to be monitored. The performance of DG penetration depends largely upon the selection of the optimal parameter values. Special optimizing techniques used to evaluate optimal value of parameter in context of heuristic nature of variable. A literature review has been carried out on different optimal technique used to optimize parameter values. The authors have reviewed various definitions related to DG and conventional and non conventional technologies on which DG are based. Various issues regarding DG integration have been discussed. Exhaustive reviews of many optimization techniques have been done for optimal location and size of DG.