This study presents a hierarchical distributed structure based on the Holonic concept for reactive power control in smart grids. Holons, as the main parts of the proposed framework, are able to negotiate together, change their boundaries, and alter the role of their members. These abilities improve the flexibility and performance of the novel structure in order to adapt itself to different situations. The proposed methodology is successfully scrutinised through different case studies based on a transmission test system connected to seven distribution networks. The new method is compared with two structures using a set of evaluation indices. The simulation results have revealed that improving the computational efficiency, minimising the active power losses and voltage deviations, optimal utilisation of reactive power sources, less data traffic loads, and increasing the fault tolerance are some key features of the proposed approach.