In the islanded microgrid, the mismatch in line impedance hinders the traditional droop control from achieving an equal distribution of reactive power among distributed generation (DG) sources. To achieve reactive power sharing among DG sources and enhance the flexibility and reliability of the controller, the paper first analyzes the reasons behind the failure of traditional droop control in achieving reactive power sharing and proposes an adaptive droop coefficient that can be dynamically adjusted to meet the conditions for reactive power sharing, thus resolving the issue of unequal reactive power distribution. Additionally, to enhance the flexibility and reliability of the reactive power sharing controller, a dynamic distributed observer is designed and its convergence is proven. The dynamic distributed observer allows DG sources to obtain the necessary information in a flexible and reliable manner in a distributed fashion. Finally, the proposed control strategy is validated through simulations in four different scenarios, demonstrating its superiority and effectiveness.