Newtonian physics fail to explain quantum phenomenon.
Materialism is essentially a philosophical stance, that everything in the world is physical. It's not something that is likely to be solved empirically and it's not clear how you would even prove it one way or another. Anything as-yet unexplained might yet yield to a physical explanation, and insofar as physics is well-understood, skeptics can retreat into talking about mental states and so on.
Interesting. From a philosophical standpoint I see no quarrel. You could replace "physical" with "god" in your definition and it would read true to many religions. It's when dogmatism overrides doubt, questioning, and humility that people are misguided, in scientific theory and religion.
The difference is that the concept of physical minimally satisfies the required features to fill the conceptual role implied by science. If you replace physical with god, you are either eliminating the necessary properties of god or you're assuming more than is warranted.
"God, therefore, is the one most simple essence of the entire universe"
-Nicholas de Cusa
"We shall find God in everything alike, and find God always alike in everything."
-Meister Eckhart
"The superior devotee sees that God alone has become everything...He finds that everything, above and below, is filled with God."
-Ramakrishna
"In order to attain perfect union, we must divest ourselves of God...The common belief about God, that He is a great Taskmaster, whose function is to reward or punish, is cast out by perfect love; and in this sense the spiritual man does divest himself of God as conceived of by most people."
-Henry Suso
Are you hypothesizing the mind is entirely self contained within the brain and independent from the rest of the body and it's environment?
As to social dynamics, well, that's like trying to explain the behavior of bulk matter or ensembles of things generally. The tools we use are quite different from explaining the behavior of atoms, but we're pretty sure that one way or another, the behavior of a rod of steel is determined more or less entirely by the fundamental particles/fields/stuff that make it up. There's nothing spooky about a bar of steel even though it behaves completely differently than the quarks and electrons it's made of.
The Stanford Encyclopedia of Philosophy explains it better: https://plato.stanford.edu/entries/physicalism/