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Photoalignment by azo dye nanolayers can provide high alignment quality for large-area liquid crystal devices. Application of this technology to active optical elements for signal processing and communications is a hot topic of photonics research. In this article, we review recent demonstrations and performance of liquid crystal photonic devices, discuss the advantages of the proposed technology, and identify challenges and future prospects in the research field of photoaligned multi-domain liquid crystal structures. We believe that the developments discussed here can provide directions for future research and potential opportunities for applications of liquid crystal devices based on multi-domain photoalignment. © 2024 by the authors.