A decentralized power grid is a modern system that implements demand response without requiring major infrastructure changes. In decentralization, the consumers regulate their electricity demand autonomously based on the grid frequency. With cheap equipment (i.e., smart meters), the grid frequency can be easily measured anywhere. Electrical grids need to be stable to balance electricity supply and demand to ensure economically and dynamically viable grid operation. The volumes of electricity consumed/produced (p) by each grid participant, cost-sensitivity (g), and grid participants’ response times (tau) to changing grid conditions affect the stability of the grid. Renewable energy resources are volatile on varying time scales. Due to the volatile nature of these renewable energy resources, there are more frequent fluctuations in decentralized grids integrating renewable energy resources. The decentralized grid is designed by linking real-time electricity rates to the grid frequency over a few seconds to provide demand-side control. In this study, a model has been proposed to predict the stability of a decentralized power grid. The simulated data obtained from the online machine learning repository has been employed. Data normalization has been employed to reduce the biased behavior among attributes. Various data level resampling techniques have been used to address the issue of data imbalance. The results showed that a balanced dataset outperformed an imbalanced dataset regarding classifiers’ performance. It has also been observed that oversampling techniques proved better than undersampling techniques and imbalanced datasets. Overall, the XGBoost algorithm outperformed all other machine learning algorithms based on performance. XGBoost has been given an accuracy of 94.7%, but while combining XGBoost with random oversampling, its accuracy prediction has been improved to 96.8%. This model can better predict frequency fluctuations in decentralized power grids and the volatile nature of renewable energy resources resulting in better utilization. This prediction may contribute to the stability of a decentralized power grid for better distribution and management of electricity.