Deformation of polycrystalline metallic materials induces intrinsic formation and evolution of various types of microstructures at different length scales due to different underlying physical mechanisms affecting the plasticity, damage and fracture behavior. At nanomicro scale metals under irradiation develop certain zones free from irradiation and localization occurs in these areas as so-called clear bands affecting the ductility and the failure of the material. At meso scale dislocations form various dislocation cell structures induced by the deformation. At grain level polycrystalline materials develop stress and strain localization around the grain boundaries which could lead to inter-granular cracking e.g. through stress corrosion cracking. These are some examples to illustrate the influence of the microstructure on the global behavior of materials. In this context, the current work addresses different microstructure formation examples, focusing especially on the inter-granular deformation localization, through a strain gradient crystal plasticity framework and links it to different failure mechanisms.