Modern and future power systems require accurate measurements for a wide range of applications such as control, protection, and electrical energy consumption billing. The overall accuracy of measured electrical quantities depends on individual error contributions from different stages of the signal path within the measurement instrument, as well as power quality conditions of the grid. Present developments in hardware and signal processing techniques allow accurate measurements of voltage and current signals in almost any possible scenario. Nevertheless, in order to achieve the required level of accuracy, considerations should be given when choosing components for the different stages of the measuring instrument design. In this paper, a review and analysis of some of the most common hardware components and signal processing techniques is presented. Recommendations are given to provide practical guidance for developing power system measurement devices, which focus on the applications of electrical energy metering and phasor measurement units.