Pharmaceutical scientists throughout the world are trying to explore thin films as a novel drug delivery tool. Thin films have been identified as an alternative approach to conventional dosage forms. The thin films are considered to be convenient to swallow, self-administrable, and fast dissolving dosage form, all of which make it as a versatile platform for drug delivery. This delivery system has been used for both systemic and local action via several routes such as oral, buccal, sublingual, ocular, and transdermal routes. The design of efficient thin films requires a comprehensive knowledge of the pharmacological and pharmaceutical properties of drugs and polymers along with an appropriate selection of manufacturing processes. Therefore, the aim of this review is to provide an overview of the critical factors affecting the formulation of thin films, including the physico-chemical properties of polymers and drugs, anatomical and physiological constraints, as well as the characterization methods and quality specifications to circumvent the difficulties associated with formulation design. It also highlights the recent trends and perspectives to develop thin film products by various companies.