Nonwoody biomass as a source of lignin is abundant and can be utilized for broader applications. Currently, nonwoody lignin as a functional material for material applications and sustainable chemical synthesis is increasingly urgent, especially for the global need to replace dependence on fossil-based materials with environmentally friendly biomass-based materials. This chapter reviews the latest developments in various sources of lignin from nonwoody materials, environmentally friendly extraction methods, and synthesis of lignin and nanolignin from nonwood through top-down and bottom-up approaches. It evaluates essential characteristics such as particle size and distribution, morphology, and surface chemical groups that determine their applicable functions. This review is compiled based on a comprehensive literature review of the latest literature. Lignin and nanolignin are essential as fillers and reinforcements in composite materials and precursors for sustainable chemical synthesis. In addition, its multifunctional applications are also increasingly developing in the energy and electronics fields, including electrode materials for supercapacitors, batteries, sensors, and environmentally friendly electronic devices. However, the main challenges still lie in controlling particle homogeneity, surface chemical stability, and integration on an industrial scale. Thus, nonwoody lignin and nanolignin have great potential as as multifunctional biomaterial platforms supporting the transition towards a circular economy and green technology, with future development directions focused on optimization of synthesis methods, surface engineering, and cross-disciplinary integration to expand their applications at a commercial scale.