A unified power flow controller (UPFC) is a versatile compensator providing multi-variable control for the critical power systems (CPS). In an attempt to reduce the search space for optimal allocation of UPFC thereby standardizing the deliberation over UPFC placement, zone-wise segregation of the network into weak and healthy zones is logically executed by an advanced network power stability indicator (NPSI). The UPFC performance is ascertained by a new line flow margin index (LFMI), power loss index and its economic benefit. The latter is derived by the cash outflow reduction (COR) and the internal rate of return (IRR), calculated by practical aspects like installation and maintenance cost, considering inflation and interest on amortization. For optimization, an improved version of the wind-driven optimization algorithm is proposed with finite-mass air parcels and intra-particle forces. An improved normalization technique is adopted for the multi-ranged, multi-objective problem. To simulate the CPS, the 57-bus test system with enhanced arbitrary load is considered. A significant reduction in power losses is observed when optimizing in reduced search space and the optimal location of G-UPFC is found to be in bus 13–15, which is also a part of the weaker zone. Several other results confirmatively approve the proposed approach of isolating the most appropriate zone for UPFC allocation based on the healthy and weak regions along with the proposed techno-economical evaluators.