A microgrid is a network of interconnected loads and distributed energy resources acting as a single controllable entity. A microgrid can be connected and disconnected from the grid to enable it to operate in both grid-connected and island-mode of operation. During grid-connected mode, the grid being dominant in nature regulates the frequency and maintains the power balance. However, when there is a fault in the grid side, the customer loads are isolated resulting in interrupted power supply and loss of utility revenue. Thus, micro sources like PV, wind, etc. are used, that feed the customer loads ensuring an uninterrupted power supply. During fault conditions, the system is switched to an islanding mode of operation. Achieving maintenance of power balance and regulation of frequency during islanding mode of operation is a challenging task due to varying penetration by the renewable energy sources. A coordinated control strategy aims at achieving this objective by implementing cascaded droop, voltage, and current control loops and implementing Fuzzy Logic Controls (FLC) to achieve efficient power balance, reduced switching transients, and a balanced voltage supply.