Both theoretical analysis and numerical simulation for displacement Talbot lithography are conducted based on angular spectrum diffraction. The factors which influence the grating fringe quality obtained by displacement Talbot lithography such as displacement distance, starting position, non-uniform displacement velocity and different characteristics of lighting source are also discussed in detail. Simulation results show that, when the displacement distance is integer multiples of Talbot period, the factors of initial position and non-uniform displacement velocity have little influence on imaging quality of displacement Talbot lithography. When there is a certain spectral width of the incident light source or the divergence angle is not larger than 0.05°, the displacement Talbot lithography can still obtain double frequency grating fringes whose contrast is more consistent, which verifies that the displacement Talbot lithography possesses an outstanding process applicability. Displacement Talbot lithography does not require expensive and complicated projection optical system, and can overcome the problem of limited depth of focus for Talbot self-imaging. Meanwhile, displacement Talbot lithography has higher tolerance for the positioning accuracy between mask and substrate as well as the substrate planeness. The method has promising potential to be applied in non-planar substrate for the manufacture of periodical micro structures with wide area, low expense and high precision.