The present study suggests that standardized methodology, careful site selection, and stratigraphy are essential for investigating ancient ecosystems in order to evaluate biodiversity and DNA-based time series. Based on specific keywords, this investigation reviewed 146 publications using the SCOPUS, Web of Science (WoS), PUBMED, and Google Scholar databases. Results indicate that environmental deoxyribose nucleic acid (eDNA) can be pivotal for assessing and conserving ecosystems. Our review revealed that in the last 12 years (January 2008–July 2021), 63% of the studies based on eDNA have been reported from aquatic ecosystems, 25% from marine habitats, and 12% from terrestrial environments. Out of studies conducted in aquatic systems using the environmental DNA (eDNA) technique, 63% of the investigations have been reported from freshwater ecosystems, with an utmost focus on fish diversity (40%). Further analysis of the literature reveals that during the same period, 24% of the investigations using the environmental DNA technique were carried out on invertebrates, 8% on mammals, 7% on plants, 6% on reptiles, and 5% on birds. The results obtained clearly indicate that the environmental DNA technique has a clear-cut edge over other biodiversity monitoring methods. Furthermore, we also found that eDNA, in conjunction with different dating techniques, can provide better insight into deciphering eco-evolutionary feedback. Therefore, an attempt has been made to offer extensive information on the application of dating methods for different taxa present in diverse ecosystems. Last, we provide suggestions and elucidations on how to overcome the caveats and delineate some of the research avenues that will likely shape this field in the near future. This paper aims to identify the gaps in environmental DNA (eDNA) investigations to help researchers, ecologists, and decision-makers to develop a holistic understanding of environmental DNA (eDNA) and its utility as a palaeoenvironmental contrivance.