Induced dipole dominant electrorheological fluid (ID-ERF) is a new type of ERF. After high energy ball milling (HEBM) process, dielectric particles produce a large number of oxygen vacancies, and the dipoles formed by the polarization of these oxygen vacancies provide excellent ER properties. ID-ERF has the advantages of high shear stress, low current density, long service life, anti-sedimentation, simple preparation method, etc. It should be a new generation of ERF material suitable for practical application. In this work, facing at the shortcomings of traditional particle MD simulation of ERF system, a coarse-grained molecular dynamics (CGMD) model is constructed. The evolution of ID-ERF is simulated under the conditions of no electric field and 5 kV/mm electric field. Proves that there is an adsorption layer of carrier liquid on the surface of ER particles, and shows BCT lattice arrangement under electric field. The sinusoidal shear strain is applied to the model, and calculate the variation of strain amplitude, loss factor, storage modulus and loss modulus. In addition, we prepared ID-ERF and tested its performance to compare with the simulation results.