Grass is collected whenever you are on the grass terrain type. An action icon appears with a hand around some grass. Clicking that action icon collects 1 grass.
If you have Rhythmic Strength, a papyrus basket and a scythe, it is possible to collect multiple grass per click (number depends on the quality of the scythe)
Grass can also be collected in greenhouses.
See also: basic resources, offline chores.
You dry Grass to make Straw.