With the advent of modern power grids constituted by non-conventional and renewable distributed energy resources (DERs), considerable interest has been developed to solve the potential issues related to power quality, harmonic distortions, voltage unbalance and frequency restoration. Power fluctuation and inefficient power sharing in typical distributed generation (DG) systems lead to decreased efficiency and raise reliability concerns. These problems are directly instigated by the interface inverters in a micro-grid configuration in grid-connected as well as in islanded modes. In smart or micro-grids based on DG, an adaptive and distributed rather than lumped or centralized control is highly desirable so as to adapt to the real-time dynamics of the system. This work proposes the use of distributed control techniques for interface inverters in micro-grids and utilizes added controllers to yield harmonic mitigation, proper power sharing and improved power quality. The results show consistency with IEEE standards.