Reliability and safety are crucial for the operation of a dynamically tuned passive power filter (DTPPF). Safe performance of DTTPFs implies complete normal filtering without failure within a specified period. To prevent potential disaster or economic loss, it is desirable to achieve early warning of any core device faults in a DTPPF based on its running state and to optimize its harmonic mitigation performance. In this paper, we explore effective methods for identifying core device faults in DTPPFs. First, we summarize the characteristic parameters of faults, running state parameters, parameters required for fault monitoring, and fault type parameters. Then, a cloud server-assisted remote monitoring and fault identification system for DTPPF is proposed, which consists of monitoring system’s architecture and cloud servers’ software architecture as well as software design of the back-end service layer and functional design of the front-end application layer. Our experiments demonstrate that the proposed system can monitor the real-time operational status of the DTPPF, enabling remote diagnosis and identification of core device faults. Moreover, it is user-friendly, as it is capable of optimizing equipment maintenance schedules and utilizing manufacturers’ service capacities. Therefore, this research provides a theoretical foundation for harmonic mitigation in low-voltage distribution networks and is valuable for practical engineering applications in industrial power grids.