Microgrids have been proposed in order to improve reliability and stability of electrical system and to ensure power quality of grid. Microgrid consists of low voltage distribution systems with distributed energy resources, such as wind turbine and photovoltaic power systems, together with storage devices. It is essential to protect a microgrid in both the grid-connected and the islanded mode of operation against all different types of faults. This paper describes microgrid protection and safety concept with central control and monitoring unit where multifunctional intelligent digital relay could be used. This central control & monitoring infrastructure is used for adaptive relay settings strategy for micro grid protection. Also operational safety design concept and fault This paper describes microgrid protection and safety concept with central control and monitoring unit mitigation technique is proposed to ensure confidence in protection system.