In this study, we introduce and discuss a concept of a granular-oriented radial basis function neural networks (GRBF NNs). In contrast to the typical architectures encountered in radial basis function neural networks(RBF NNs), our main objective is to develop a design strategy of GRBF NNs as follows : (a) The architecture of the network is fully reflective of the structure encountered in the training data which are granulated with the aid of clustering techniques. More specifically, the output space is granulated with use of K-Means clustering while the information granules in the multidimensional input space are formed by using a so-called context-based Fuzzy C-Means which takes into account the structure being already formed in the output space, (b) The innovative development facet of the network involves a dynamic reduction of dimensionality of the input space in which the information granules are formed in the subspace of the overall input space which is formed by selecting a suitable subset of input variables so that the this subspace retains the structure of the entire space. As this search is of combinatorial character, we use the technique of genetic optimization to determine the optimal input subspaces. A series of numeric studies exploiting some nonlinear process data and a dataset coming from the machine learning repository provide a detailed insight into the nature of the algorithm and its parameters as well as offer some comparative analysis.