Under specific processing conditions, the nonlinearity of photoresist is strong, which can be advantageously used to make rectangular holographic grating masks. In order to clarify the relationship between the fabrication conditions and the groove profile formation, a model for simulating the development of photoresist grating is presented. The theoretically simulated groove profiles are in good agreement with profiles obtained from SEM photographs of fabricated gratings. Based on this model, combined with using a rigorous code for modeling grating diffraction, the efficiency of the reflected -1st order of diffraction is simulated as a function of development time. The main features of the simulated curve are found to coincide with those of the experimental in-situ monitoring curve. It is verified that the remarkable nonlinear effect of photoresist must be accompanied with a vast difference of etch rate between the center of a bright fringe and the center of its neighboring dark fringe. The model has been demonstrated capable of characterizing the influence of fabrication conditions on holographic grating groove formation.