Graphene has emerged as one of the promising nanoscale components of polymer nanocomposites owing to its exceptional properties. The 2D graphene material, when distributed appropriately in the host polymer can significantly alter the load, electron, and phonon transfer behavior of the nanocomposites. The in-plane strong covalent bonds in graphene are accountable for these unique properties, whereas the weak van der Waals forces existing between the adjacent monolayer graphene planes are responsible for the re-stacking or agglomeration of layers. Hence, the most critical challenge in translating these properties in high-performance graphene polymer nanocomposite is to alleviate the agglomeration of graphene. This can be achieved by improving the distribution states of graphene in the matrix by; (1) enhancing the dispersion and (2) controlling the relative lattice orientation of graphene in substrates to create an alignment or orientation. Mitigating the agglomerates during the composite fabrication will significantly extend the benefits of graphene's inherent properties to the nanocomposite. In this review article, various methods for improving dispersion and orientation of graphene in polymer nanocomposites is elucidated. A decision flowchart on the choice of dispersion or orientation based on the properties is considered and the techniques to quantify and verify the same is deliberated. Furthermore, composites' performance in terms of mechanical, electronic, and thermal enhancements due to the molecular level dispersion or anisotropic orientation of graphene is discussed. This review provides a constructive guidance in the composite processing methods and to correlate the enhancement of properties with the distribution state of graphene in composites.