Microgrid systems are a beneficial alternative to decentralized power grids that can provide greener and high quality power with greater efficiency. Use of lithium-ion batteries (LIBs) in the microgrid systems has rapidly gained attention because of their remarkable energy density, durability, and performance characteristics. This paper explores the advantages of using LIBs in microgrid systems including energy storage, load adjustment, and peak shaving, and examines their advantages: high energy efficiency, less carbon footprint, and superior reliability and resilience. Furthermore, the discussion on challenges associated with the use of LIBs in microgrid systems such as cost, safety and need for maintenance and monitoring. The study has also discussed the importance of numerous artificial intelligence (AI) techniques for battery management. In order to create more resilient and sustainable energy systems, this paper emphasizes the significant interest in and promise of LIBs in microgrid systems.