An overlapping decentralized control scheme is presented and applied to automatic generation control (AGC) for multi-area power systems. Based on the inclusion principle, the system is first decomposed in the expanded space as a group of pair-wise subsystems ( areas). Then, the decentralized controllers designed, by standard linear quadratic (LQ) control laws are implemented in each pair-wise subsystem. Finally, the overlapping decentralized controller is obtained by coordinating and contracting the pair-wise decentralized controllers from the expanded space to the original space, preserving the inclusion conditions. When applied to AGC of a four-area power system, the proposed methodology not only guarantees AGC qualities, but also increases the system reliability with respect to a wide variety of structured perturbations. Simulation results illustrate the effectiveness of the presented approach both in the general case of information structure constraints and in the cases when some pairs of subsystems are disconnected by unpredicted faults.