The integration of conventional synchronous generators (SGs) and virtual synchronous generators (VSGs) in microgrids (MGs) is increasingly common due to the growth of renewable energies. However, demand fluctuations and grid faults can pose significant challenges to the stability of the MG, causing system frequency and active power oscillations. This study proposes control approaches for an isolated/islanded AC MG that consists of an VSG and an SG to mitigate power and frequency oscillations. The proposed methods utilize the VSG’s adjustable damping coefficient, which is determined by intelligent controls. The proposed strategies significantly reduce power fluctuations by 53% and frequency deviations by 75%, thereby improving system stability and reliability. The suggested controllers use short-term large damping to effectively amplify the system’s AC frequency dynamic response and enhance power delivery across different power-sharing modes. The controllers do not require additional communication infrastructure and rely solely on the local AC frequency for feedback. Furthermore, a novel synchronization mechanism with positive effects on system stability is presented