Due to its abundance, wood is the pre-eminent lignocellulosic raw material for a sustainable bioeconomy based society. Wood is widely used as fuel, construction material, and raw material in cellulose and lignocellulose based products. Besides the established uses of wood powder, like co-firing with coal and biofuel production, there are also novel uses and process applications, e.g., advanced wood-plastic composites and biochemical production are emerging for which the pulverization or fine grinding of wood is an essential pre-treatment step. Due to the tenacious nature of the wood matrix, size reduction is an energy intensive process and thermal or chemical pre-treatment may be needed to improve economy. This paper provides a broad overview of the fine grinding of wood. First, wood breakage mechanisms and the mechanisms of size reduction are presented, followed by fine grinding techniques and wood pre-treatment methods. A comparison of the specific energy consumption of wood fine grinding in both a gaseous and liquid environment is illustrated. Additionally, examples are given of the role played by pre-treatment methods in decreasing energy consumption. The particle aspect ratio is discussed briefly. Finally, the use and requirements of wood powders in various applications are discussed.