Narrowband power-line communication (PLC) over distribution networks is gaining the attention of researchers, as a communication medium in future power grids. This paper investigates the application of narrowband PLC in smart distribution grids, starting from a historical overview on the accomplished technological progress and continuing with a comparison of the advantages and drawbacks of PLC technology to other smart-grid communication solutions. The analysis shows that narrowband PLC applications are best suitable for medium-voltage (MV) networks, due to the vast and complex geographical extent. The channel and topological characteristics of MV distribution networks are examined for different operational states and configurations, since they are important for the optimal design and implementation of the PLC infrastructure. The analysis is also extended to an existing overhead MV distribution network with distributed-generation units. The obtained results and the proposed methodology are useful and comprehensive tools for the efficient implementation of PLC technology in future smart grids.