Granular flow rheology has broad implications on earth science and industrial processing of raw materials. This dissertation is an overview of our effort to understand dense granular flow and the influence of microscopic, grain-scale processes on dynamic friction from basic principles of nonequilibrium thermodynamics. First, I will provide a short introduction to the Shear-Transformation-Zone (STZ) theory of plastic deformation and the underlying theoretical framework of nonequilibrium thermodynamics, and use the Haxton-Liu hard-sphere simulations as a testing ground for the theory. Next, I will briefly discuss grain fragmentation and examine its implication on shear weakening and shear localization; in so doing, we account for the formation and persistence of shear bands of fragmented particles. Finally, I propose a way to incorporate acoustic effects, particle angularity, and interparticle friction into the STZ model. We show good agreement with laboratory experiments on angular sand particles that indicate shear-induced acoustic compaction at intermediate strain rates. We show in addition that friction between particles is essential in producing stick-slip instabilities, which can be controlled by the confining pressure and external vibrations.