The increasing frequency of tropical cyclones, such as typhoons and localized heavy rainfall, increases the risk of flood damage in urban areas around the world. Countries implementing flood prevention projects use qualitative risk assessments, such as flood risk assessments, to support decision-making. However, existing flood risk assessment methods are not able to select and reflect only the damage targets that are directly exposed to flood risk. In addition, existing indexing methods are limited in improving the skewness of the raw data distribution, which distorts the calculated flood risk index. This study conducted a flood risk assessment based on an indicator-based approach using flood risk maps and grid data utilizing indicators (buildings, road area, etc.) from 2016 to 2019 for 44 cities and counties in the Gyeongsang-do Province. The flood risk assessment in this study consists of four items (Hazard, Exposure, Vulnerability, and Capacity) and nine indicators. Instead of using statistical data, we used the overlapped grids with the flood risk map for Exposure and Vulnerability indicators to reflect the flood risk exposed targets in the risk assessment. The limitations of existing indexing methods, such as min–max normalization, were improved by dividing the distribution into ten quantiles and scoring each quantile interval when indexing the indicators. Finally, entropy weights and Euclidean distance were applied to calculate the annual flood risk index of 44 cities and counties. The annual flood risk indices for local governments were arranged in descending order and then, the rankings of flood damage amount in 2019 were compared with the calculated index rankings. The sum and mean of absolute errors were 386 and 9.897, and the root mean square error was calculated as 11.930, which showed an improvement over the existing method. Using the calculated indices, it is possible to create Hazard vs. Capacity graph, Exposure vs. Vulnerability graph, or annual flood risk index graph. These graphs can be utilized to understand the level of exposure to flood risk of local governments and to assess the level of response through the Capacity index that contributes to damage reduction. It is believed that the flood risk assessment method presented in this study not only accurately identify the flood risk for local governments but can also be used to support decision-making processes to strengthen the government’s disaster prevention capabilities.