α″-Fe16N2 is a promising environmentally friendly rare-earth-free permanent magnet material with ultra-high saturation magnetization. Recent research has demonstrated experimentally through a thermally quenching treatment using γ′ phase Fe4N as a precursor to synthesize α″-Fe16N2 in bulk format. In this research using Molecular Dynamics (MD) simulation, we investigated the γ′-Fe4N phase thermal decomposition process and the potential phase transition from face center cubic (fcc)-phase to body center tetragonal (bct)-phase. As nitrogen concentration is higher in γ′-Fe4N (5.9 wt. %) than that in α′-Fe8N or α″-Fe16N2 (3 wt. %), Nitrogen bond formation through atom diffusion is studied with a “Nitrogen-rich” grain boundary (GB) model to find out whether lower-Nitrogen content bct Fe–N solid solution can be formed. Modified Embedded Atom Method (MEAM) interatomic potential of Fe–N system is applied. Post-processing including Nitrogen bond mapping/tracking is also performed for the thermostat-controlled heating and quenching simulation process. We also applied virtual XRD computation to characterize the material crystallographic texture before and after the thermal treatment.