Natural fibers are capable substitutes to conventional synthetic fibers, primarily because of their economic and environmental advantages, as well as they find widespread applications in textile, construction, and non-load-bearing applications in the case of automotive and aircraft industries. This paper presents a comprehensive review of natural fiber-reinforced composites, focusing on their failure behavior, failure modelling techniques, and associated theories. Finite element modelling is widely applied in the damage modelling of natural fiber as well as natural fiber-based green composites. Formation of representative volume elements in conjunction with homogenization emerges to be the common and most effective multi-scale technique used for determining the effect of microstructures on the thermal and mechanical properties of the natural fiber-reinforced composite. To provide a better understanding of the insight of damage aspects of natural fiber composites an up-to-date review catering to various aspects ranging from its manufacturing techniques, failure processes and mechanisms, finite element modelling techniques, and mechanical performance is very much required. This review aims to address the above-stated issues, challenges, and details of achievements made with them.