Due to the extremely large sizes of power grids, IR drop analysis has become a computationally challenging problem both in terms of runtime and memory usage. In order to design scalable algorithms to handle ever increasing power-grid sizes, the most promising approach is to use a ”divide-and-conquer” strategy such as domain decomposition. Such an approach not only decomposes a large problem into manageable sub-problems, it also naturally allow a parallel processing solution for further speedup in computation time. As a result, a power-grid analysis algorithm based upon the traditional domain decomposition method, which has strong limitation on the size of the interfaces between the sub-problems and therefore severely limits its capability in solving very large problems. In this paper, we present a block-iterative domain-decomposition algorithm which effectively combines the advantages of direct solvers and iterative methods.