This work proposes a power management and control strategy for islanded microgrids, which consist of multiple electronically-interfaced distributed energy resource (DER) units, to achieve a prescribed load sharing scheme. This strategy provides 1) a power management system, 2) DER local controllers, and 3) a frequency control and synchronization scheme. This strategy is then generalized to incorporate both power-controlled and voltage-controlled DER units. To prevent DER unit trip-out or damage under short-circuit conditions, an overcurrent/overload protection scheme is also proposed. Under microgrid islanding and communication failure, there is a need to switch from an active to a latent microgrid controller. To minimize the resultant transients, control transition should be performed smoothly. Two smooth control transition techniques, based on 1) an observer and 2) an auxiliary tracking controller, are proposed to achieve a smooth control transition. Extensive case studies, based on time-domain simulations and real-time hardware-in-the-loop case studies are also conducted to demonstrate performance of the proposed method.