The primary objective of this paper is to create a suitable reliability assessment framework for Cyber–Physical Multi-MicroGrid (CPMMG) distribution systems, considering the device-level failures of control and protection systems. For this purpose, the typical structure of a CPMMG distribution system with a centralized protection system is first exemplified. Then, the interdependencies between cyber and power infrastructures are investigated in such systems. Regarding the protection system, a Markov model is presented to investigate hidden failures of fault location, isolation, and service restoration processes. Possible operation modes in a CPMMG distribution system – normal, islanding, joint, and shutdown modes – are then explained and modeled. Finally, a suitable Monte Carlo simulation-based reliability assessment framework is developed to quantify well-known reliability indices. In addition, two new adequacy indices are proposed: Interrupted but Gained Compensation (IbGC) and Supplied by Expensive Resources (SbER). A comprehensive case study is conducted to reveal the salient features of the proposed framework. The result showed that the impact of cyber failures in such systems is highly dependent on the design of the cyber system. Therefore, the adverse impact of cyber failures of control and protection systems can be effectively mitigated by proper design.