Cascaded on-load tap changers (OLTC) are widely used for coarse voltage control in electric power systems. There could be an interaction between load dynamics and OLTC control under certain system operating conditions which may lead to OLTC limit cycle phenomena thereby resulting into long term voltage oscillations in the system. In the recent years, renewable and non-renewable local generation units have been getting interconnected in modern power systems. The existence of OLTC limit cycles in the presence of local generation units has not been addressed thoroughly in the literature. In this paper, the OLTC limit cycle phenomena, which can occur due to interactions among load-voltage dynamics, OLTC controls and the local generation, has been investigated. Also, a strategy is proposed for mitigating the power system oscillations which can be induced by OLTC limit cycles, especially with local generation units in the network. The proposed mitigation strategy including detailed investigations and analyses have been verified for a two-bus system, and successfully tested on a multi-bus system with local generation units using MATLAB.