The physics of rock deformation in the lithosphere governs the formation of tectonic plates, which are characterized by strong, broad plate interiors, separated by weak, localized plate boundaries. The size of mineral grains in particular controls rock strength and grain reduction can lead to shear localization and weakening in the strong ductile portion of the lithosphere. Grain damage theory describes the competition between grain growth and grain size reduction as a result of deformation, and the effect of grain size evolution on the rheology of lithospheric rocks. The self-weakening feedback predicted by grain damage theory can explain the formation of mylonites, typically found in deep ductile lithospheric shear zones, which are characteristic of localized tectonic plate boundaries. The amplification of damage is most effective when minerallic phases, like olivine and pyroxene, are well mixed on the grain scale. Grain mixing theory predicts two coexisting deformation states of unmixed materials undergoing slow strain rate, and well-mixed materials with large strain rate; this is in agreement with recent laboratory experiments, and is analogous to Earth's plate-like state. A new theory for the role of dislocations in grain size evolution resolves the rapid timescale of dynamic recrystallization. In particular, a toy model for the competition between normal grain growth and dynamic recrystallization predicts oscillations in grain size with periods comparable to earthquake cycles and postseismic recovery, thus connecting plate boundary formation processes to the human timescale.