The Internet of Things (IoT) has emerged as a transformative technology in the development of smart cities, enabling real-time monitoring, intelligent automation, and data-driven decision-making across urban infrastructure. This paper makes three principal contributions: (i) a structured analysis of the three-layer IoT architecture—Perception, Network, and Application—and its role in enabling scalable urban intelligence; (ii) a domain-mapped review of IoT applications across traffic management, energy efficiency, waste management, public safety, and environmental monitoring, supported by global case studies from Padova (Italy), Singapore, Barcelona, and Amsterdam; and (iii) a challenge-mitigation framework addressing the four critical barriers to smart city IoT deployment: interoperability, security, data management, and cost. Drawing on recent literature (2020–2025), the paper finds that IoT integration reduces urban energy consumption by up to 30%, improves emergency response times significantly, and enables proactive infrastructure maintenance through predictive sensor analytics. The paper concludes that the convergence of 5G, Edge Computing, and AI-driven analytics with IoT infrastructure represents the critical path for sustainable, resilient, and equitable smart city development ^{[1, 2, 3]}.