We investigate a quantum annealing approach based on real-time quantum dynamics for graph coloring. In this approach, a driving Hamiltonian is chosen so that constraints are naturally satisfied without penalty terms and the dimension of the Hilbert space is considerably reduced. The total Hamiltonian, which consists of driving and problem Hamiltonians, resembles a disordered quantum spin chain. The ground state of the problem Hamiltonian for graph coloring is degenerate. This degeneracy is advantageous and is characteristic of this approach. Real-time quantum simulations in a small system demonstrate interesting results and provide some insight into quantum annealing.