In this paper, a distributed controller is designed for regulating power flow among multiple microgrids in islanded modes with variable renewable energy sources (RESs) while minimizing dynamic interactions. The controller is designed in such a way that it has the capability of gathering information from the neighboring microgrids. This paper also analyzes the dynamic interactions among multiple interconnected microgrids during an islanded mode of operation based on the detailed dynamical model of microgrids. Both modal analysis and nonlinear simulations are used to identify the critical issues that might degrade the stability under different operating conditions. From the simulation results, it is found that multiple microgrids operated with local controllers can significantly affect the stability and damping performance. The proposed control scheme is implemented on a test distribution system with multiple microgrids and time-domain simulations are performed to verify its effectiveness of the control scheme. It is found that the designed controller provides excellent performance in minimizing the negative interactions through the regulation of power flow among multiple microgrids in the islanded mode.