Cancer is one of the leading causes of death in the world despite significant progress in the field of medical sciences. The traditional therapeutic approaches like chemotherapy, radiotherapy, and surgery have greatly contributed to the increase in survival rates. The major drawback of these approaches is that they are not specific to cancer cells. These approaches are known to cause damage to healthy tissues, leading to systemic toxicity, severe side effects, poor patient compliance, and poor quality of life. The need for effective therapeutic approaches to combat cancer has resulted in the development of a novel approach in cancer therapy, i.e., nanotechnology. Nanotechnology-based Targeted Drug Delivery Systems (NTDDS) incorporate liposomes, polymeric nanoparticles, dendrimers, solid lipid nanoparticles, carbon nanotubes, metallic nanoparticles, etc., to deliver drugs to cancer sites. These approaches incorporate the concept of the Enhanced Permeability and Retention (EPR) effect and surface functionalization techniques to deliver drugs to cancer sites. The concept of theranostics, which combines diagnostic and therapeutic approaches in a single platform, is a revolutionary concept in cancer therapy. The concept of theranostics is expected to bring about a paradigm shift in cancer therapy by providing personalized therapy. The concept of theranostics can be applied to cancer therapy to develop novel approaches in cancer therapy. The article aims to discuss the principles, mechanisms, types, materials, working methodology, applications, advantages, limitations, and recent advancements in nanotechnology-based approaches in cancer therapy. The article also aims to discuss the future prospects in cancer therapy using nanotechnology. Nanotechnology is expected to bring a paradigm shift in cancer therapy from traditional “Kill all” approaches to “Kill selectively” approaches. Nanotechnology-based approaches are expected to become the backbone in the development of novel approaches in cancer therapy in the near future.