Synchronous Generator

You make it sound as if there are discrete steps taking place when in fact these are all continuous processes. What distinguishes them is the speed at which they take place, hence my electronic/electrical vs. mechanical statement.

First, the AVR and the governor operate in quadrature (at right angles to each other), so that changing one has a minimal effect on the other. Real power (P) comes from the fuel and reactive power (Q) comes from the excitation system; when combined vectorially the resultant is apparent power (S). The AVR is electronic so it is the quickest loop, the field is electrical so it takes longer to respond to the AVR's input, and the governor's actions are mechanical so it takes the longest for its actions to be felt (the inertia is huge).

The basic input to the AVR is the terminal voltage, as Vt changes the AVR changes the field current in whatever direction is necessary to keep Vt constant, regardless of what caused the change in Vt. Depending upon the type of AVR, the system, and the load, there may be other inputs such as sensing the load current (Ia) to further refine the AVR's operation.

Generally speaking, unless the AVR has a PSS (Power System Stabilizer) controlling the output of the machine, the AVR has no knowledge of what the governor is doing and the governor has no knowledge of what the AVR is doing, they just sense incremental changes from their setpoints and react to get their particular control variable error back to zero.

The larger source of increased induced torque will have the greater influence on the voltage fluctuation.

There are really three sets of timeframes operating simultaneously in a modern utility-class turbine generator control systems; mechanical measured in tenths of seconds or longer, electrical measured in milliseconds, to cycles, and electronic measured in microseconds to milliseconds. Notice that these all overlap, but generally speaking what might be sensed and acted upon electronically in microseconds could take seconds before the governor's action is even noticed in the overall response of the system.