Why does my grass luminesce when I step on it?
If it were fireflies or glow-worms, you would have seen them pretty quickly with your searching and collection of grass. I would guess that this is some kind of bioluminescence caused by bacteria or Dinoflagellate.  I have seen this effect when walking on wet sand at the ocean. It is quite fascinating and fun to watch. According to wikipedia, bioluminescent bacteria and Dinoflagellate can exist in fresh water. The moisture in your yard might be enough to support their growth.

https://en.wikipedia.org/wiki/Bioluminescent_bacteria

https://en.wikipedia.org/wiki/Dinoflagellate :


  The luminescence occurs as a brief (0.1 sec) blue flash (max 476 nm) when stimulated, usually by mechanical disturbance. Therefore, when mechanically stimulated—by boat, swimming, or waves, for example—a blue sparkling light can be seen emanating from the sea surface.[66]