We present a detailed discussion of a novel dynamical renormalization group scheme: the dynamically driven renormalization group (DDRG). This is a general renormalization method developed for dynamical systems with non-equilibrium critical steady state. The method is based on a real-space renormalization scheme driven by a dynamical steady-state condition which acts as a feedback on the transformation equations. This approach has been applied to open nonlinear systems such as self-organized critical phenomena, and it allows the analytical evaluation of scalling dimensions and critical exponents. Equilibrium models at the critical point can also be considered. The explicit application to some models and the corresponding results are discussed