Molecular dynamics simulations are employed to study electronic and mechanical properties of smallest ZnO nanowires. It has been shown that the electronic band structure of nanowires varies with uniaxial strain and this property can be used for sensing deformation state when nanowires are embedded in a polymer matrix. A new atomic strain concept is formulated that allows calculation of continuum quantities directly within a discrete atomic (molecular) system. Molecular modeling and strain calculations have been performed on ZnO/polypropylene nanocomposites and compared with a carbon nanotube/polypropylene system. The simulation cell of nanocomposite has been subjected to uniaxial tension along an inclusion axis and the analysis has been performed for seven deformation steps with equilibration runs after each step. Both nanoinclusions follow global nanocomposite strain to a certain loading and then both exhibit deformation lag as loading level increases. This is clear evidence that both systems are prone to interfacial sliding. The sliding is more significant with the ZnO nanowire as compared to carbon nanotube, which is also evidenced in weaker interaction of this system.