Rapid growth in electrical load demand with lack in generation of electrical power and transmission line congestion has set the trend for smart electrical system. In smart electrical system, need arises to deploy more non-conventional energy sources, which include Renewable Energy Sources (RES) as well as non-RES. Though, the RES are getting more encouragement due to several advantages over non-RES. In recent past, there is significant increase in the penetration of small units of local generation in existing distribution system. These small units (RES and non-RES), usually known as Distributed Generation (DG), may offer several technical, economic and environmental benefits like reduction in power loss, improvement in power quality, reliability, system security, reduction in capital cost investment at large level, reduction in emission of greenhouse gases and many more. However, these advantages are difficult to achieve due to some technical and non-technical barriers. To extract maximum potential benefits from the DG, the optimal planning of such sources in distribution network has always been a topic of great interest. Though, fresh researchers face many problems in carrying out research in this area due to lack of knowledge about suitable research software, standard test networks, types of renewable/non-renewable sources, appropriate literature, etc. This paper uses a systematic approach to discuss the DG and its technologies with advantages, disadvantages and effects on end users as well as on the utility. A comparative study of all optimization techniques for planning of DG in existing power system considering optimal size and location is also included. This paper also involves the details about some standard test systems along with details of useful software's (licensed & open source) for DG planning. The present study can add worthful information and serve as a base for the fellow working in this area.