Renewable energy sources seem more feasible and cost-effective than power plants using fossil fuels for power generation. Maintaining an appropriate power balance between the source and the demand is almost impossible since renewable energy sources like wind and solar are unpredictable and have fluctuating loads. Microgrids are being elevated as an effective technique for combining small-scale distributed energy sources to produce electricity at the distribution voltage level. Because of the nature of the energy formed, some of the energy produced from these sources cannot be used immediately. Power electronic interfaces are required for the flexible, secure and reliable functioning of distribution systems between micro sources. Dealing with power quality concerns is among the main technical difficulties in the operation and control of microgrid systems that are either grid-connected or stand-alone. These significant issues are mostly caused by the design, mode of operation, nature and performance of distributed energy sources in the microgrid system. Current and voltage harmonics, voltage sag/swell, fluctuation and unbalance are the main power quality problems brought on by the large penetration of distributed generators, nonlinear and unbalanced loads. This study intends to analyze major power quality challenges and the control mechanisms that have been developed for enhancing the power quality in microgrids.