Wide-area protection systems are capable of eliminating or mitigating the consequences of disturbances by obtaining multi-point information about the grid system through measurement and communication techniques, and power system control and protection systems. In this study, distribution data in the grid system is collected and preprocessed, the distribution state of the grid system is estimated using data fusion methods, and an optimization method for distribution state estimation based on distributed computing methods is proposed. Then the grid wide-area protection system is designed by combining the grid system fault diagnosis method. Simulation and example analysis results show that the grid wide-area protection system based on data fusion and distributed computing has good performance in processing grid data and detecting and localizing grid faults, and the maximum localization error of faulted line points is maintained within 0.770%. In addition, this grid wide-area protection system is able to accurately detect a certain circuit fault in a regional grid system where faults are frequent, avoiding large-scale power outages and ensuring the stable operation of the grid system. This study has important scientific significance and application value for grid multivariate data fusion modeling and real-time fault detection, and provides an effective widearea protection scheme for the grid system.