Modern power systems require increased intelligence and flexibility in control and optimization. This issue is becoming more significant today due to the increasing size, changing structure, emerging renewable energy sources and Microgrids, environmental constraints, and the complexity of power systems. The control units and their associated tuning methods for modern power systems surely must be intelligent (based in flexible intelligent algorithms). This chapter addresses a new intelligent approach using a combination of fuzzy logic and Particle Swarm Optimization (PSO) techniques for optimal tuning of the existing most popular Proportional-Integral (PI) or Proportional-Integral-Derivative (PID) controllers in the power electric industry. In the proposed control strategy, the PI (PID) parameters are automatically tuned using fuzzy rules, according to the on-line measurements. In order to obtain an optimal performance, the PSO technique is used to determine the membership functions’ parameters. The proposed optimal tuning scheme offers many benefits for a new power system with numerous distributed generators and Renewable Energy Sources (RESs).In the developed tuning algorithm, the physical and engineering aspects have been fully considered. To demonstrate the effectiveness of the proposed control scheme, secondary frequency control problem in an islanded Microgrid (MG) system is considered a case study. The main source of power for a Microgrid is small generating units of tens of kW that are placed at the customer site. Simulation studies are performed to illustrate the capability of the proposed intelligent/optimal control approach.