We present a geometric theory of inertial manifolds for compact cocycles (non-autonomous dynamical systems), which satisfy a certain squeezing property with respect to a family of quadratic Lyapunov functionals in a Banach space. Under general assumptions we show that these manifolds posses classical properties such as exponential tracking, differentiability and normal hyperbolicity. Our theory includes and largely extends classical studies for semilinear parabolic equations by C. Foias, G. R. Sell and R. Temam (based on the Spectral Gap Condition) and by G. R. Sell and J. Mallet-Paret (based on the Spatial Averaging) and their further developments. Besides semilinear parabolic equations our theory can be applied also to ODEs, ODEs with delay (extending the inertial manifold theories of Yu. A. Ryabov, R. D. Driver and C. Chicone for delay equations with small delays), parabolic equations with delay and parabolic equations with boundary controls (nonlinear boundary conditions). In applications, the squeezing property can be verified with the aid of various versions of the Frequency Theorem, which provides optimal (in some sense) and flexible conditions. This flexibility gives a possibility in applications to obtain conditions for low-dimensional dynamics, including, in particular, developments of the Poincaré-Bendixson theory and convergence theorems from a series of papers by R. A. Smith.