Keloid is an outcome of abnormal cellular response in the wound healing process with excessive fibroblast and collagen deposition in the dermal layer of the skin. It is characterized by a scar showing fibrous outgrowth that grows beyond the original boundaries of the wound. Thus, it is cosmetically and functionally disturbing to the patient. Keloidal development depends on various patient and environmental factors, possibly initiating abnormal wound healing. Due to abnormal wound healing, various aberrant cellular responses are observed during keloid development, like delayed inflammatory response, increased growth factors, varied cytokine level, decreased apoptosis, increased angiogenesis, and imbalanced proteinases. Bacteria and the immune system also play a role in keloid development. Advancements like single-cell RNA sequencing and transcriptomics studies have led to a better understanding of pathogenesis. In line with the complex pathogenesis, the later part of the review covers a detailed analysis of various treatment options employed for keloid, which includes silicone-based topical therapy, drug-based therapy, invasive approach (surgery), and minimally invasive therapies (radiation, laser therapy, and cryotherapy). The advantages and limitations of individual and combination therapies are also discussed. Keloids tend to re-occur after treatment; hence, follow-up is very important, making keloid treatment a complex procedure. Novel therapeutics in keloid have advantages like better efficacy of drugs, less pain, self-administration, and fewer side effects. A few nanotherapeutics advancements, such as microneedles, nanoparticles, liposomes, and exosomes, are discussed in the review.