The rapid development of distributed generation (DG) has a significant impact on modern distribution networks, providing environmental, economic, and technical benefits. At the same time, this phenomenon also poses new challenges for system protection, operation, and planning. Many studies have focused on the optimal placement and sizing of DG, but most of the existing reviews are fragmented, with most studies focusing on a specific aspect while ignoring a comprehensive analytical framework. In this sense, this research aims to provide a comprehensive, multi-faceted review on this topic, based on more than a decade of research, including technical, economic, environmental, and protection issues. A new classification framework with four dimensions is proposed for evaluating optimization methods, DG technologies, and planning strategies using a unified analytical framework. This review article presents a critical comparison of mathematical, analytical, and metaheuristic methods, which facilitates an understanding of the trade-off between different dimensions. Moreover, the article reveals the commonly overlooked effects of DG on protection coordination and system robustness. Additionally, the article presents potential research directions for protection-aware and multi-objective optimization. The research reveals that the effectiveness of the integrated planning approach, which considers network constraints, the variability of renewable sources, and multi-scenario operation, is vital to maximize the positive effects of DG. This article presents an integrated guideline for researchers and practitioners, which clearly explains the challenges, existing gaps, and new opportunities that will define the future of the distribution network with the integration of DG.