Quoted from: https://water.usgs.gov/water-resources/legacy-software/ 

A version of MODFLOW, called MODFLOW-LGR (for Local Grid Refinement) was developed (Mehl and Hill, 2005) to support the use of locally refined grids to simulate groundwater flow. MODFLOW-LGR allows smaller parts of a larger model domain to be refined without refining the entire model. Mehl and Hill (2007) expanded the original scope of MODFLOW-LGR to include multiple areas of refinement within a single model domain. Mehl and Hill (2010) allows rivers simulated with the Streamflow-Routing Process (SFR) to be routed through locally refined grids. The current version (2013) couples grids using the ghost-node method rather than the shared node method (Mehl and Hill, 2013). MODFLOW-LGR is integrated in the new MODFLOW-OWHM version of MODFLOW. Local grid refinement functionality is also available through MODFLOW-USG.

MODFLOW-LGR Information and Downloads

Software Downloads

The current release of MODFLOW-LGR is version 2.0.0

Note: Users are encouraged to read the documents that are provided in the 'doc' directory of this software distribution.

• Summary of MODFLOW-LGR [5KB TXT]
• Installation instructions [10KB TXT]
• Release history [2KB TXT]
• MODFLOW-LGR v.2.0.0 (released September 19, 2013) compiled for Microsoft Windows, with source code, test problems, and documentation [4.2MB ZIP]

Documentation of MODFLOW-LGR

• Mehl, S.W. and Hill, M.C., 2005, MODFLOW-2005, the U.S. Geological Survey modular ground-water model -- documentation of shared node local grid refinement (LGR) and the Boundary Flow and Head (BFH) Package: U.S. Geological Survey Techniques and Methods 6-A12, 68 p.
  This report describes the theory and input instructions at the time of the initial MODFLOW-LGR v1.00 release.
• Online MODFLOW-LGR User's Guide
  The User's Guide is not a tutorial and is primarily intended for those already familiar with MODFLOW. The Guide includes the most up-to-date instructions and related information for the current release of MODFLOW-LGR. The Guide can be used as a quick way of looking up input formats and USGS options available.
• Mehl, S.W. and Hill, M.C., 2007, MODFLOW-2005, the U.S. Geological Survey modular ground-water model -- documentation of the multiple-refined-areas capability of local grid refinement (LGR) and the Boundary Flow and Head (BFH) Package: U.S. Geological Survey Techniques and Methods 6-A21. 13 p.
  This report documents the addition of the multiple-refined-areas capability to shared node Local Grid Refinement (LGR) and Boundary Flow and Head (BFH) Package of MODFLOW-2005.
• Mehl, S.W. and Hill, M.C., 2010, MODFLOW-LGR -- Modifications to the Streamflow- Routing Package (SFR2) to Route Streamflow through Locally Refined Grids: U.S. Geological Survey Techniques and Methods 6-A34, 15 p.
  This report documents modifications to the Streamflow-Routing Package (SFR2) to route streamflow through grids constructed using the multiple-refined-areas capability of shared node Local Grid Refinement (LGR) of MODFLOW-2005.
• Mehl, S.W., and Hill, M.C., 2013, MODFLOW-LGR -- Documentation of ghost node local grid refinement (LGR2) for multiple areas and the boundary flow and head (BFH2) package: U.S. Geological Survey Techniques and Methods 6-A44, 43 p.
  This report documents the addition of ghost node Local Grid Refinement (LGR2) to MODFLOW-2005. LGR2 provides the capability to simulate groundwater flow using multiple block-shaped higher-resolution local grids (a child model) within a coarser-grid parent model.
• Video: MODFLOW-LGR with ModelMuse
  ModelMuse is a graphical user interface (GUI) that can be used with MODFLOW-LGR. The video uses the older shared-node method that uses half cells at the interface. The newer ghost node method uses full cells along the interface, and is more consistent with how local grid refinement is done in MODFLOW-USG.