We present a multiscale theory and simulation of thermodynamic and hydrodynamic meso- and macrotexture formation to provide fundamental principles for control and optimization of structures in polymer-liquid crystal material systems. In thermotropic flow-aligning nematic polymers, the process of texture formation is driven by the hydrodynamic instabilities. It is found that, as the shear rate increases, the pathway between an oriented nonplanar state and an oriented planar state is through texture formation and coarsening. It is found that the texture transition cascade (unaligned monodomain double right arrow defect lattice double right arrow defect gas double right arrow aligned monodomain) is remarkably consistent with the experimentally observed textural transitions of sheared lyotropic nematic polymers. On the other hand, properties of multiphase polymer-liquid crystal blends are greatly influenced by the presence of textures, or spatial distribution of topological defects, and the process of texture formation is mainly driven by the thermodynamic instabilities. The phase separation mechanism is completely different from isotroipic-isotropic mixing because the continuous phase exhibits liquid crystalline ordering. The homogeneous and gradient energy of the system establishes the dynamics and correlation of the morphological structures. A pair of topological defects form inside each droplet and separate because of the presence of repulsive Peach-Koehler forces. Defect structures form cellular polygonal networks that are mostly four-sided, and the side of each polygon ends either at the droplet or at another defect.