The concept of Smart Grid (SG) has comprehensively overhauled the scene of electric power grid and the integration of Prosumers , where an entity can consume and produce simultaneously extempo- rised in a complete paradigm shift. This requires a detailed knowl- edge base model at each entity level that can react according to con- textual changes. This paper outlines a generic and layered ontology design for such complex Prosumer oriented SG, which enables the autonomous in- tegration and real-time management of distributed and heteroge- neous sources. It details the relevant layer to the right granularity with keen insight into distributed co-ordination and semantic het- erogeneity. It also presents an inductive based reasoning on such ontology to make it thoroughly elucidative.