Taking the advantage of Internet of Things (IoT) enabled measurements, this paper formulates the event detection problem as an information-plus-noise model, and detects events in power systems based on free probability theory (FPT). Using big data collected from phasor measurement units (PMUs), we construct the event detection matrix to reflect both spatial and temporal characteristics of power gird states. The event detection matrix is further described as an information matrix plus a noise matrix, and the essence of event detection is to extract event information from the event detection matrix. By associating the event detection problem with FPT, the empirical spectral distributions (ESDs) related moments of the sample covariance matrix of the information matrix is computed, to distinguish events from “noises”, including normal fluctuations, background noises, and measurement errors. Based on central limit theory (CLT), the alarm threshold is computed using measurements collected in normal states. Additionally, with the aid of sliding window, this paper builds an event detection architecture to reflect power grid state and detect events online. Case studies with simulated data from Anhui, China, and real PMU data from Guangdong, China, verify the effectiveness of the proposed method. Compared with other data-driven methods, the proposed method is more sensitive and has better adaptability to the normal fluctuations, background noises, and measurement errors in real PMU cases. In addition, it does not require large number of training samples as needed in the training-testing paradigm.