In this paper, the unknown input observer (UIO) design for singular delayed linear parameter varying (LPV) systems is considered regarding its application to actuator fault detection and isolation. The design procedure assumes that the LPV system is represented in the polytopic framework. Existence and convergence conditions for the UIO are established. The design procedure is formulated by means of linear matrix inequalities (LMIs). Actuator fault detection and isolation is based on using the UIO approach for designing a residual generator that is completely decoupled from unknown inputs and exclusively sensitive to faults. Fault isolation is addressed considering two different strategies: dedicated and generalised bank of observers' schemes. The applicability of these two schemes for the fault isolation is discussed. An open flow canal system is considered as a case study to illustrate the performance and usefulness of the proposed fault detection and isolation method in different fault scenarios.