Floating solar photovoltaic (FPV) systems are rapidly emerging as a significant component of the renewable energy sector, offering higher energy yields and improved efficiency compared to traditional land-based solar installations. This comprehensive review evaluates the current state of FPV technology by consolidating recent research findings and assessing their broader implications. Studies indicate that FPV systems can generate 0.6 to 4.4% more energy, with efficiency gains ranging from 0.1 to 4.45% over equivalent land-based systems. The paper systematically examines the technological advancements, key system components, classification methods, and performance metrics associated with FPV systems. Furthermore, it highlights the diverse challenges hindering their widespread deployment while considering the economic, environmental, and social factors that will shape the future of this promising renewable energy solution.