In this paper, an islanded microgrid is modeled a linear multivariable dynamic system. Then, the multivariable analysis tools are employed. The generalized Nyquist diagram and relative gain array for the stability assesment and solving the pairing problem among the inputs and outputs. Droop control dependency on the X/R ratio of the microgrid DERs is recognized and its type is proposed using the relative gain array concept. Robust stability, nominal performance and robust performance requirments are evaluated in order to a better understanding of the system dynamics. Finally thrree different controllers including H, H and sequential PID controllers are designed and compared.