Various researchers have actively addressed several decentralised control techniques for voltage source converter (VSC) dominated islanded microgrid over the years. However, voltage and frequency control, proper power -sharing, and power quality are open issues for autonomous microgrid VSC systems. A unique voltage and fre-quency control approach is proposed for an autonomous microgrid VSC-based distributed generation (DG) system. The proposed scheme has three folds. An improved double band hysteresis current controller (IDBHCC) is proposed for a three-phase inverter interfaced DG in an islanded microgrid application. The IDBHCC scheme encompasses a common-mode third-harmonic to the current control error, which extends the linear operating range of the VSC and also effectively reduces the total harmonic distortion (THD), thus improving the power quality. Additionally, effective current regulation is achieved by separating common-mode interacting current from the measured current. Furthermore, a proportional-integral fractional-order derivative with filter (PIFODN) controller is introduced for the inner loop voltage control, which provides extra flexibility owing to its fractional properties. A sparrow search algorithm is employed to tune the controller parameters for optimum PIFODN controller control action. Bandpass filter droop, an analogous secondary control method with plug-and-play capabilities, is adopted to enable appropriate load sharing among parallel DG inverters and alleviate fre-quency and voltage variation. The proposed control scheme performance is validated via SimPowerSystem tools in the Matlab Simulink for single and multi DG microgrid systems. The proposed control method has also been tested in the OPALRT-4510 real-time simulator as well. The results have shown that the proposed control method is very good at controlling voltage and frequency with a quick response time. The PIFODN controller has a better dynamic response and is better at handling changes in the system response when the system is perturbed. The IDBHCC scheme has a lower THD than the state-of-the-art control technique.