Cascading outage is a sequence of multiple dependent component outages that gradually happened in a power system. One of the main reasons is due to the hidden failure in a protection system that may cause to a power system instability leading to a system cascading collapse. This paper presents a computationally realistic technique used to determine the estimated average probability of a dynamic system cascading collapse in conjunction with the effect of hidden failure on a protection system. This includes a realistic calculation of the probability of hidden failure as it will provide significant impact on the results of the estimated average probability of dynamic system cascading collapse. The estimated average probability of a system cascading collapse is then used to identify the severity of total loading condition leading to a higher risk of a dynamic system cascading collapse. This information is essential for the reason that it will assist the power system utility to determine the highest point of increased system loading condition before the occurrence of critical power system cascading collapse.