This paper discusses possible failure modes in zonal hydraulics for construction machinery. The “zonal” or “decentralized” hydraulics is one of the methods first introduced in the aerospace industry and utilized for hybridization of construction machinery. This method is realized with pump-controlled actuators, which are distributed throughout the system. Due to both electric and hydraulic components being involved and tough working conditions, electro-hydraulic systems such as zonal hydraulics tend to be very complex, and where each one of components can fail. If any of the parts of the electro-hydraulic system are damaged, the appearing problems may be hard to diagnose due to the complexity of a multi-domain system. A general description of zonal hydraulic systems and their components are introduced. Then, a review of the possible failure modes related to zonal hydraulics is presented for construction machinery. This paper provides a broad insight into electro-hydraulic systems and their failures, as well as review the current literature available regarding fault studies.