Most of the power system networks have significant dynamic loads. In this paper, induction motor is considered as a dynamic load which causes voltage stability problems in power systems. This paper presents an analysis to investigate the critical parameters of power systems with dynamic loads for stability studies. To investigate the critical parameters, a single machine infinite bus (SMIB) system with induction motor load is considered in this paper. The dynamic characteristics of a large system are also analyzed based on these critical parameters. Here, the system is linearized about an operating point using Taylor series expansion method. By analyzing the participation factors and eigenvalues of the considered system, the role of critical parameters is investigated for a large system.