Nanotechnology-based development of drug delivery systems is an attractive area of research in formulation driven R&D laboratories that makes administration of new and complex drugs feasible. It plays a significant role in the design of novel dosage forms by attributing target specific drug delivery, controlled drug release, improved, patient friendly drug regimen and lower side effects. Polysaccharides, especially chitosan, occupy an important place and are widely used in nano drug delivery systems owing to their biocompatibility and biodegradability. This review focuses on chitosan nanoparticles and envisages to provide an insight into the chemistry, properties, drug release mechanisms, preparation techniques and the vast evolving landscape of diverse applications across disease categories leading to development of better therapeutics and superior clinical outcomes. It summarizes recent advancement in the development and utility of functionalized chitosan in anticancer therapeutics, cancer immunotherapy, theranostics and multistage delivery systems.