The modernization of the governance system for traditional Chinese medicine (TCM) constitutes the institutional cornerstone for advancing the high-quality development of the TCM sector in China. Drawing on focus group discussions with TCM administrative leaders, experts, and scholars who examined the connotations, implementation pathways, problems, and challenges associated with the modernization of TCM governance and governance capacity, this study employed a constructivist grounded theory methodology. Through systematic procedures including initial coding, focused coding, axial coding, and theoretical coding, the study develops a theoretical framework for the modernization of the TCM governance system, with "governance goals - governance philosophy - collaborative governance - institutional systems" as the core. Building upon this framework, the study proposes several implementation strategies for modernizing TCM governance system, such as prioritizing people's health, fostering cultural confidence in TCM, enhancing multi-stakeholder collaboration, and comprehensively improving the institutional architecture of TCM. These findings offer theoretical insights to support the advancement of a modernized TCM governance system.