Essentially, consumers are mostly affected by interruptions in the distribution systems due to the direct connection between the distribution systems and the consumers. Hence, it would have been better to start the planning at the distribution stage. Reduction of power systems is advantageous to improve the computation efficiency and for fast and cost-efficient reliability analysis. In this paper, we propose a zonal formation approach via the sensitivity and reliability analysis methods. Sensitivity analysis is to identify the differential relationship among electric quantities in distribution systems, while reliability analysis focuses on the voltage variation during short circuit implementation. The modified IEEE 33 bus test system are used to illustrate the simplification of power system by implementation of proposed zonal formation.