Smart hydrogels have emerged as a promising third-generation platform for controlled and targeted drug delivery, offering stimuli-responsive behavior that enables precise spatial and temporal drug release. These hydrophilic polymer networks respond to physiological triggers such as pH, temperature, and enzymatic activity, thereby improving drug bioavailability, therapeutic efficacy, and reducing systemic toxicity. Preclinical studies across various disease models—including cancer, diabetes, inflammatory, and neurological disorders—have shown significant benefits, including sustained drug release, enhanced tissue targeting, and improved safety profiles. Furthermore, integration with nanoparticles and technologies like 3D printing has expanded their functionality, enabling applications in theranostics and personalized medicine. Despite notable advancements, challenges such as reproducibility, biodegradation, regulatory classification, and manufacturing scalability remain barriers to clinical translation. Ongoing research focusing on standardization, biocompatibility, and regulatory alignment is essential to fully realize the potential of smart hydrogels in precision therapeutics.