The increasing penetration of renewable energy resources, distributed generation, and flexible electricity demand creates a growing need for continuous observability and responsive management in modern power systems. This study develops an integrated conceptual framework explaining how Internet of Things (IoT)-enabled monitoring can support power-quality management, energy efficiency, and renewable-energy integration. A structured qualitative literature review and thematic synthesis were conducted on 41 unique scholarly sources published between 2018 and 2026, including prior studies on IoT-based industrial monitoring and power-system operation that establish continuity with the authors’ research trajectory. Evidence was organized using a literature-analysis matrix covering sensing and metering, communication, computing, monitoring functions, operational outcomes, and implementation constraints. The synthesis identifies a common pathway from physical sensing and smart metering through IoT communication and edge/cloud processing to analytics and decision support. This observability pathway supports earlier recognition of power-quality conditions, more informed energy-management and demand-response decisions, and improved visibility of variable renewable generation. Cybersecurity, interoperability, scalability, and communication reliability remain cross-cutting constraints. The main contribution is an integrated IoT-enabled smart-grid observability framework that links these previously fragmented domains and clarifies that monitoring is an enabling layer rather than a stand-alone corrective mechanism. The framework provides a basis for subsequent empirical validation in laboratory microgrids, simulation environments, and real power-system deployments.