Simple way is they depend on people phonong in to say the power is out. They see an area has a few calls about power outage, and that this area is fed by either a single substation or by a larger substation. The larger substations do have a monitoring system that shows load current, phase current and voltage to the central office via a remote viewer ( either a radio link, via a phone line call or via a dedicated fibre link these days) to show thasr feeder that has a fault. then they despatch a crew to the area to fix it.
the crews go to the distribution station and see which feeders are tripped, and they check if the reclosers have tripped safe ( for overhead lines reclosers operate 3 times then need manual reset as there is a hard fault, for things like a bird or branch they trip then reconnect typically 2 seconds later) or if the ground fault sensors have tripped for a circuit. They then go out to around the middle of the line and open it with either line switches or with oil switched, and reclose the line. If it works then the fault is downstream and the do the same again further or if it trips still they work upsteam to the station till they find the faulty section. When found they might use a ring feed to restore power and work on the failed cable later at leisure, or for overhead they have to walk the failed section till they find the fallen pole, tangled wire or tree branch on the wiring, then fix it.
If it is on the output of a substation they will typically check fuses, then find the section that has blown fuses. First they replace the fuses ( using a blast shield as if there is still a fault the fuse may rupture during insertion) and see if the fault has cleared. If the fault is hard then they have to trace the cable, either by thumping it with a tester or by using a TDR to locate the short. TDR works quite well, you can see every joint, every tap to a subscriber and every change in cable type along the line with it. When you get distance to fault you pull out the cable lay maps ( always on paper and often a century or more old) and measure along it till you get to the area, then go there and set up your camp. Then you look for fresh digging, open it up and fix your cable, or if there is nothing then you use a tone locator to find the cable ( there could be a few cables in the section, and only one failed one) and start to expose cable till you find the fault ( normally very visible as a blown area) and splice in a new section with 2 Scotchcasts and after testing insulation resistance you apply power again.