Over time, clumps of iris become overgrown and they don't bloom well anymore or they stop blooming all together. Old undivided iris are also more prone to disease, insect damage, and root rot. This is one plant that really benefits from being divided on a regular basis - maybe every 3 or 4 years.
Iris should be divided in the late summer after they have stored energy in their rhizomes all summer. If you wait too long into the fall to replant the rhizomes, the roots may not have enough time to establish before the ground freezes and the plants will be subject to frost heaving. August or September is a great time to do this.