Pharmacovigilance (PV) has emerged as an essential component of healthcare systems, aimed at identifying, evaluating, and preventing risks associated with medicines. With the rising complexity of therapeutics and the increasing burden of adverse drug reactions (ADRs), PV ensures that the benefits of drugs outweigh potential harms. This review presents an overview of the historical development of pharmacovigilance, the significance of ADR monitoring, and the functioning of global and national PV systems, including the World Health Organization’s International Drug Monitoring Programme (IDMP) and the Pharmacovigilance Programme of India (PvPI). The review further explores drug and disease classification systems, vaccine safety surveillance, methodologies for safety data generation, and the role of pharmacogenomics in predicting ADRs. Special focus is given to vulnerable populations such as children, pregnant women, and the elderly. Challenges of underreporting, the need for effective communication strategies, and the integration of digital tools and artificial intelligence are also discussed. By highlighting current practices and future directions, this paper emphasizes the importance of strengthening PV systems for global drug safety and patient well-being.