The electric power systems are interconnected for the economical and reliable operation of power supply systems. An interconnection of power systems can be implemented through AC and DC links. A variable frequency transformer (VFT) has emerged as an alternative for asynchronous interconnection, like back-to-back HVDC links. Unlike back-to-back HVDC links, VFT requires reduced reactive power, offers quicker incipient transient recovery, and has coherent damping ability. Various control strategies have been proposed in the literature to achieve the controllable and reliable operation of VFT. The VFT can be scalable for high power exchange by implementing the VFT Park model. The VFT is essentially a doubly-fed induction machine (DFIM) based system that needs slip rings and brushes in the rotor circuit. Hence, brushless doubly-fed induction machine (BDFIM) based VFT systems and their various topologies are proposed in the literature. In this paper, a comprehensive review is carried out, which includes: power system networks interconnection philosophy, power flow controllers used in the interconnected networks, FACTS controllers, and HVDC link with their technical merits and limitations. A comparison of VFT with its counter technology back-to-back HVDC link is also elaborated, which suggests VFT a better option for asynchronous grid interconnection. Moreover, a thorough literature review is done concerning VFT configuration, controls, and scaling with research papers and patents. Furthermore, detailed mathematical modeling of the VFT system is also carried out along with the numerical simulations under both steady-state and various fault conditions using PSCAD/EMTDC software.