This paper investigates small-signal stability and decentralized control design for distribution electric energy systems with a large penetration of distributed generators. Two real world distribution systems are studied in this paper. The first system is the IEEE 30-node distribution system and the second one is the distribution system on Flores Island, one of the western group islands of the Azores Archipelago. The Block Gerschgorin Theorem and Liapunov function-based stability criteria are applied to formally state sufficient conditions for small-signal stability. The results illustrate that when the governor control of distributed generators is designed without considering interactions between generators, small-signal instability could occur in the system and even the sufficient conditions for stability would not be satisfied. In the next step, the paper assesses control design to stabilize potentially unstable distribution systems. The main focus is on designing enhanced decentralized control based on the introduced stability criteria. The findings illustrate that implementing the enhanced decentralized control could ensure stability and support a large penetration of distributed generators.