Due to the neglect of the impact of feeder impedance, the conventional droop control may result in instability and errors in proportional load sharing when implemented in islanded micro-grid. The inherent limitations of the conventional droop control are analyzed, and it is pointed out that the inverse proportion between the feeder impedance and the rated capacity is the necessary and sufficient condition for the power sharing; then an improved droop control based on virtual impedance is proposed to achieve accurate proportional load sharing, in which virtual impedance is introduced to reduce the power coupling brought by the resistance components of the feeder impedance model and an additional improved voltage/reactive power control is proposed to eliminate reactive power sharing errors caused by imbalanced line impedance. Accurate power sharing can be achieved and the load voltage can be maintained within the desired range by the proposed control strategy. Simulation results are provided to verify the analysis and design.