1. A system for condition monitoring and fault diagnosis of a machine comprising: a control system operably coupled to the machine having a hierarchical arrangement of controllers, each comprising a processor and a memory, the hierarchical arrangement of controllers configured to implement: a data collection function that acquires time histories of selected variables for one or more machine components according to specified sampling parameters; a preprocessing function that calculates specified characteristics of each of the time histories individually; an analysis function for evaluating the specified characteristics of each of the individual time histories to produce one or more hypotheses of a condition of the one or more machine components; and a reasoning function for determining the condition of the one or more machine components from the one or more hypotheses, wherein at least one of the functions resides in a higher level of the hierarchical arrangement of controllers such that condition monitoring and fault diagnosis data are used at a level where intelligence to process the data is present.