Nanomaterials, in addition to their miniaturized size, exhibit numerous physicochemical properties that are entirely different from their bulk counterpart, making them an ideal candidate for wide-ranging futuristic applications. Magnetic nanoparticles (MNPs) are a versatile class of nanomaterials that have garnered intense research interests in all areas of science, engineering, and technology. The additional privilege that MNPs can be detected and remotely manipulated by external magnetic fields open up the opportunity for their deployment in in vivo technologies. Due to their small size, MNPs can be impregnated suitably inside sensing materials to enhance their sensitivity and accuracy significantly. Despite their wide-ranging applications, ligand functionalization on their challenging surface restricts their commercial applications. Herein, this review highlights their synthesis route, their fundamental properties, challenges and strategies toward functionalization, and novel emerging applications in various areas. In this review, several unmet issues are touched upon and personal viewpoints are presented based upon the gained experiences from published literature and lab-works. Penultimately, this review aims not only to provide in-depth insights into the route of synthesis, their functionalization strategies, and novel applications but also aims to attract readers of diverse fields to take up several existing challenges and come up with further advancements in this direction. This review also tries to open a peeping window to look into upcoming robust technologies based on MNPs.