Minimizing total system failure could improve the reliability of power network in order to optimize power system operation. In this way, reliability analysis has been proposed by researchers to tackle the mentioned problem. This paper investigates an analytical methodology for reliability assessment and failure analysis techniques in an actual distributed power system. We use reliability analysis to evaluate system design and gathering outage data in this paper. Modelling and simulation of our assumed system are implemented in electrical transient analyzer program (ETAP) software. The results of theoretical/practical reliability and failure analysis including mean time between failure, mean time to repair, availability, system average interruption frequency index, system average interruption duration index, consumer average interruption duration index, average service availability index, average service unavailability index, expected energy not supplied, expected interruption costs, and interrupted energy assessment rate are compared with the summary of reliability assessment simulation. The capability and effectiveness of reliability evaluation are demonstrated according to the simulation results through ETAP which obtained by applying it to this power system.