1. A method of operation of an image processing system comprising: determining subsets of point clouds, the subsets selected based on key points of a three-dimensional object; generating matched results based on a matching transformation of the subsets; and refining the matched results based on a refinement transformation to align different data sets of the point clouds for displaying the aligned data sets on a device, wherein the refinement transformation includes a refinement error less than a matching error of the matching transformation.