As the distribution grid moves toward a tightly monitored network, it is important to automate the analysis of the enormous amount of data produced by the sensors to increase the operators situational awareness about the system. In this paper, focusing on microphasor measurement unit (<inline-formula><tex-math notation="LaTeX">$\mu \text{PMU}$ </tex-math></inline-formula>) data, we propose a hierarchical architecture for monitoring the grid and establish a set of analytics and sensor fusion primitives for the detection of abnormal behavior in the control perimeter. Due to the key role of the <inline-formula><tex-math notation="LaTeX">$\mu \text{PMU}$</tex-math></inline-formula> devices in our architecture, an optimal <inline-formula><tex-math notation="LaTeX">$\mu \text{PMU}$</tex-math></inline-formula> placement with limited number of sensors is also described that finds the best location of the devices with respect to our rules. The effectiveness of the proposed methods are tested through the synthetic and real <inline-formula> <tex-math notation="LaTeX">$\mu \text{PMU}$</tex-math></inline-formula> data.