The TiC ceramics reinforced Fe matrix composite (TiCp/Fe) exhibits exceptional properties, including high hardness, strength, wear, and heat resistance. This study focuses on investigating the material removal mechanism to achieve high-quality and low-damage surfaces. A three-dimensional particle random distribution algorithm is proposed based on the random distribution characteristics of TiC particles. Furthermore, a multi-diamond-abrasive grinding finite element model is established using the Rayleigh probability distribution model to account for the randomness of undeformed chip thickness during the grinding process. This study combines experimental and simulation analyses to investigate the variations in grinding forces, stress field distributions, and surface and subsurface quality. The results reveal that the material removal process can be categorized into five stages: ploughing of the Fe matrix and TiC particle, TiC particle crack initiation, TiC particle crack extension, and TiC particle fracture. Moreover, the process of removing TiC particles can be further grouped into ductile removal, ductile-brittle removal, and brittle removal, depending on the undeformed chip thickness. This study improves the comprehension of the mechanism of TiCp/Fe composite material and establishes a significant practical guidance for the diamond grinding processing of metal matrix composites.