Distributed control, as a potential solution to decreasing communication demands in microgrids, has drawn much attention in recent years. Advantages of distributed control have been extensively discussed, while its impacts on microgrid performance and stability, especially in the case of communication latency, have not been explicitly studied or fully understood yet. This paper addresses this gap by proposing a generalized theoretical framework for small-signal stability analysis and performance evaluation for microgrids using distributed control. The proposed framework synthesizes generator and load frequency-domain characteristics, primary and secondary control loops, as well as the communication latency into a frequency-domain representation which is further evaluated by the generalized Nyquist theorem. In addition, various parameters and their impacts on microgrid dynamic performance are investigated and summarized into guidelines to help better design the system. Case studies demonstrate the effectiveness of the proposed approach.