The dynamic nature of the distribution network challenges the stability and control effectiveness of the microgrid in autonomous mode. In this paper, nonlinear model of microgrid operating in autonomous mode has been presented. The controller parameters and power sharing coefficients are optimized in case of autonomous mode. The control problem has been formulated as an optimization problem where Ant colony optimization is employed to search for optimal settings of the optimized parameters. In addition, nonlinear time-domain-based objective function has been proposed to minimize the error in the measured power and to enhance the damping characteristics, respectively. Finally, the nonlinear time-domain simulation has been carried out to assess the effectiveness of the proposed controllers under different disturbances and loading conditions. The results show satisfactory performance with efficient damping characteristics of the microgrid considered in this study