With the spotlight on smart grid development around the world, it is critical to recognize the key factors contributing to changing power system characteristics. This is more apparent in distribution systems with the integration of renewable energy sources, energy storage, and microgrid development. Utilities are also focusing on the reliability and resiliency of the grid. These activities require distribution automation (DA) strategies that take advantage of available technologies while promoting newer solutions. It is necessary to create a roadmap for holistic DA strategies in a smarter grid. Sustainable and resilient grid development is a paradigm shift requiring a new line of thinking in the engineering, operation, and maintenance of the power system. International perspectives on DA are also addressed, with the understanding that one solution will not fit all. Integrating technical, business, and policy decisions into the challenges will generate the development of technologies, standards, and implementation of the overall solution. The challenges in the development of industry standards are also discussed. This paper explores the challenges and opportunities in the changing landscape of the distribution systems. Evolution of technologies and the business case for infrastructure investment in distribution systems are covered in another paper by the same authors.