Climate change concerns due to the rising amounts of the carbon gas in the atmosphere have in the last decade or so initiated a fast pace of technological advances in the renewable energy industry. Such developments in technology and the move towards cleaner sources of energy have made distributed generation (DG) from renewable resources more desirable. However, it is a known fact that rising penetrations of DG can have adverse impacts on the grid structure and its operation. The microgrid concept is a solution proposed to control the impact of DG and make conventional grids more suitable for large scale deployments of DG. Covering many aspects of the power systems and power electronics fields, microgrids have become a very popular research field. This paper reviews the background and the concept of a microgrid, the current status of the literature, on-going research projects, and the relevant standards. It also presents a review of the microgrid pilot projects around the world in further detail and discusses the potential avenues for further research.