The use of smart technology presents many distinct potentials along with significant challenges in contemporary era. Those potentials included transforming industries, agricultural and service sectors by improving daily life with sustainability. These technologies develop smart homes, smart cities by improving healthcare, transportation, connectivity, finance, business etc. with comfort, safety and security. On the other hand, it creates challenges in technological, economical, legal and ethical facet along with data privacy, security, and accountability. Mobile phones, digital/quantum computers, camera surveillance, robotics, the Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), big data, digital twins, and other cutting-edge technologies have drastically altered human culture, law, religion, employment, and other aspects of society. There are significant technical, financial, ethical, and legal repercussions to using these smart technologies in smart cities and commercial organizations. Smart cities in the 21^st century utilize IoT, AI, ML, Big Data, Digital Twin, and data analytics to enhance sustainability, efficiency, and quality of life, with greater urbanization and climate challenges toward peaceful and smart living. Important prospects like intelligent traffic, smart grids, and citizen-centric services, though high implementation costs and cybersecurity risks remain significant challenges. Today, beside many prospects there are some major challenges need to handle to a balance between technological innovation and the protection of individual rights and societal values. This study will evaluate the potentials and challenges along with extensive use of smart technology to develop smart cities.