Every game has repetitive elements (no game can focus on doing more than a few things well). The point that it becomes grind is that you start noticing that you're doing those repetitive elements rather than being distracted by other things like new experiences or new situations.
You could say that the whole tier system is grindy. Why do I have to reach tier 5? It's arbitrary. It could have easily been 3 or 10 tiers as well. And why can I only research spells one tier up? It's also arbitrarily caused by the fact that missions only give rewards one tier higher. It's not properly explained by the game, making it appear grindy. This is one advantage of the XP/level system: even though it's equally arbitrary that I can only learn spells of a certain level, it's a convention in fantasy games, so it makes more sense to the player, and therefore encounters less resistance.
Another issue (that has been mentioned by others) is that upgrading spells, while fun, gives you very little reward. Spell tiers are too similar, and they're too predictable. After upgrading spells, I'm not even entirely sure which spells WERE upgraded. I have to check to remind myself that 'oh yeah, fireball's now tier 3'. I think that especially if you're going for a system with a ton of spells, you really want to go in the direction where spells are randomly shuffled per continent. Fireball could be in tier 1 and tier 4 for example. But between those tiers, it's randomly not available, so you have to research something different and interesting. Researching the same spell over and over is boring and grindy.
But the issue that I believe has the most potential for improvement is missions. You're forced to repeat missions over and over. That's not a problem in itself. The problem is that the discrete nature of missions makes them stand out as grind. Imagine that you were playing Diablo, but there were no weapons whatsoever. The only way to get weapons is to undertake special missions, that put you into a completely different 3-level dungeon where you have to kill 3 bosses. Once you kill those bosses you get a weapon, and are put back into the dungeon you were in before. It's jarring, and you'd immediately feel the grind.
It's also a waste of resources: you're crafting all these unique, interesting situations. Why not make them a part of the world? Quests have a huge advantage over missions in that they are things that get you to do what the game does anyway, but to do a couple of interesting things along the way. This is how it would work: the world would be seeded with what are currently the missions. So one chunk would be a battleground between two forces. At any point you could choose to join in and destroy the bad guys, completing that quest along the way. You'd have a boss tower with some kind of anti-map magic, where a boss resides. Rather than forcing the player to do a stealth assassination, you could have a quest available to kill the boss. You could go in with guns blazing and face higher tier monsters, or choose instead to use a stealth enchant. In other words, you build the mission scenarios into the world, and create quests that match those scenarios. Another example: going through caves, you'd encounter an umbra vortex cave. You could just try to go through to the next cave, causing the bosses to reset, or you could stay and fight the bosses. Some caves and buildings could also be locked, so that only taking on specific quests unlocks them. These would be only for specific scenarios that would be to complex to build into the world itself.
In other words, rather than making all these scenarios, build up the world so it's more interesting at the same time, and craft the quests around that world, making the feeling organic. As to how to give rewards for the quests, that's something that has to be thought through. Perhaps you could have a quest selection board back in town. You can go out in the world and solve as many quests as you want, but to collect rewards for quests from the Ilari, you have to choose which quests you want to 'turn in', and the Ilari will only give you certain rewards for certain quest types. You could also either go out and randomly solve stuff, coming to collect the rewards later, or you could assign yourself a list of quests and go seek them out.
It would be really nice if there was some big reason for going up in tier, again, to make the tier progress feel natural (this was also suggested above). So each tier would have a 'grand quest' to lead up to. After turning in X quests, you'd have to take on the next big quest. These could range from defeating a boss or a lieutenant to building some defensive structure. They could take the form of several small quests, each looking for a smaller piece of something bigger to build. They could be strategic things that weaken the overlord. Only at the end of tier 5 would your quest be to defeat the overlord, and even that should have variety so that not every overlord is just a big boss fight. Sometimes an overlord could run away to join the next continent's overlord. Sometimes he could be in hiding. A lot of variety is needed here to prevent every overlord from being the same.
