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To meet the increased customer demands, microgrid evolved. The structure of microgrid changes dynamically due to the intermittent nature of renewable-based generation, status of the distributed generator and opening of breakers for fault/maintenance. Hence, the magnitude of fault current is dynamic in nature. In order to deal with these dynamic changes, this paper addresses an adaptive central microgrid controller-based protection and relay coordination scheme, which revises the relay settings dynamically (both radial and looped configuration) for every change in topology. In the proposed algorithm, the primary relay responds to a fault immediately since the individual relays are given with fault level setting. For any abnormality in the network, the fault location is determined both via local relay and microgrid central controller (MCC). Hence, even though the local relay fails to identify the fault due to high fault impedance, the MCC locates the fault accurately and isolates the minimum faulty part. The coordination between relays is carried out by MCC in a time-graded manner based on microgrid central protection and relay coordination algorithm. The proposed algorithm is tested using Matlab in a microgrid built based on the IEEE 33 bus distribution network. [ABSTRACT FROM AUTHOR]