Transdermal drug delivery systems (TDDS) are a highly appealing and innovative method of administering drugs through the skin, as it enables the drugs to achieve systemic effects. A TDDS offers patient convenience, avoids first-pass hepatic metabolism, enables local targeting, and reduces the toxic effect of drug. This review details several generations of TDDS and the advancements made in their development to address the constraints associated with skin delivery systems. Transdermal delivery methods of the first generation have been consistently growing in their clinical application for administering small, lipophilic, low-dose drugs. Second-generation TDDS, utilizing chemical enhancers and iontophoresis, have led to the development of clinical products. Third-generation delivery systems employ microneedles, thermal ablation, and electroporation to specifically target the stratum corneum, which is the skin's barrier layer. Dermatokinetics is the study of the movement of drugs and formulations applied to the skin over a period of time. It provides important information regarding the rate and extent to which drugs penetrate skin layers. Several dermatokinetic techniques, including tape stripping, microdialysis, and laser scanning microscopy, have been used to study the intricate barrier properties and clearance mechanisms of the skin. This understanding is essential for developing and improving effective TDDS.