It is not clear whether you want to know about the location of faults or the methods which are used for locating faults. However, i shall answer briefly according to what i have understood.
Within a fully functional power system, any part or component has a probability of failure, so the fault location maybe any point starting from generation till consumption. Regarding fault locating technique: centralized monitoring systems are preferred to timely locate any type of fault within a network and take a timely mitigative actions. Modern monitoring systems mostly rely on data analysis and artificial intelligence for prognosis.
A final point: main issues in case of microgrid and grid connection would be related to control and coordination as per my understanding. Voltage/ frequency being the coordination issue and power sharing or power flow being the control issue.