The low frictional strength of smectite minerals such as montmorillonite is thought to play a crucial role in controlling the rheology and the stability of clay-rich faults. In this study, we perform coarse-grained molecular dynamics simulations on a model clay system, in which clay platelets are simplified as oblate ellipsoids interacting via Gay-Berne potential. We study the rheology and the structure development during shear in this model system, which is sheared at constant strain rates for 10 strains after compression and equilibrium. We find that the system exhibits velocity-strengthening behavior over a range of normal stresses from 1.68 to 56.18 MPa and a range of strain rates from 6.93´105 to 6.93´108 /s. The relationship between the shear stress and the strain rate follows the Herschel-Bulkley model. In general, shear is localized at lower strain rate and higher normal stress, whereas the homogeneous shear is realized at higher strain rates. The structure change by the shear is analyzed from various aspects: the volume fraction, the particle orientation, the velocity profile, and the parallel radial distribution function. We find that particle rearrangement and compaction dominate at the early stage of shear when the shear stress increases. Shear band starts to form at the later stage when the shear stress decreases and relaxes to a steady-state value. The structure development at low strain rates is similar to that in previous experimental observations. The stacking structure weakens during shear, and restores logarithmically with time in the rest period.