Blepharitis is another condition that can often disrupt normal tear production and cause dry eye. It happens when bacteria that normally lives harmlessly on the skin and eyelashes causes an infection of the eyelid margins. This produces a crusting of the lid margins (especially when you wake up), grittiness and itchiness. If not treated, your eyelids may become red, swollen and irritated from the inflammation.
Treatment may include antibiotic ointments and medication as well as regular eyelid hygiene scrubs.