As the grid becomes more magnified and complicated, wide area relaying protection system based on wide area multi-point information is bound increasingly by the communication level in the process of conversion to engineering practice. Based on the thinking of limitedness of wide area relaying protection system, the grid with complex structure is divided orderly, and fault identification and protection action are executed in each region, reducing the pressure of the communication system. By protected area, a regional fault identification algorithm based on fault direction information comparison is proposed. When a fault occured, it can make use of the fault direction information to judge fault position. Protected area is divided in IEEE10-machine 39-bus system, and taking one fault protected area as the example for simulation, the results show the feasibility of the fault identification algorithm.