Optical wireless power transfer (OWPT) has emerged as a promising technology for efficient wireless power transfer (WPT), offering advantages, such as directionality, suitability for far-field applications, and the ability to transfer power and data simultaneously. This comprehensive review classifies OWPT systems into laser power transfer (LPT) and light-emitting diodes (LED)-based OWPT. LPT uses the narrow divergence of laser beams for high-density, long-distance energy transfer, making it suitable for applications, such as satellites, autonomous drones, and electric vehicle charging. In contrast, LED-based OWPT offers a safer, more cost-effective solution for low-power applications, especially in the Internet of Things (IoT) domain. It offers advantages, such as lower power consumption and fewer safety restrictions compared to LPT. Innovations in LPT, such as high-intensity laser power beaming, distributed laser charging (DLC), adaptive DLC, simultaneous lightwave information and power transfer, and resonant beam charging are discussed. Also, recent advancements in LED-OWPT, including single-lens and double-lens systems, collimation techniques, and multi-LED arrays, are explored for their potential in powering IoT devices, wearable electronics, and smart infrastructure. First, we present a radar chart comparing various WPT techniques with respect to performance criteria. After reviewing the methods of LPT and LED-OWPT in detail, a comparison of these techniques is provided, evaluating their strengths, limitations, and application suitability. A concluding radar chart offers insights for optimizing OWPT systems tailored to specific applications. Future research directions are identified, emphasizing the need for further advancements in beam alignment, safety protocols, and hybrid systems to enhance OWPT’s scalability and practicality in real-world scenarios.