Augmented Reality (AR) overlays digital information and virtual objects on real environments to deliver enhanced, contextual experiences. Meanwhile, the Internet of Things (IoT) enables an ecosystem of interconnected smart devices and sensors. This paper reviews the synergistic integration of AR and IoT in developing next-generation intelligent systems and human-machine interfaces. A detailed analysis is presented on, integrating AR software with IoT devices and dataflows, enhanced visualization, training, navigation and contextual user experiences enabled by AR-IoT convergence, and key challenges around interfaces, latency, spatial registration, security, privacy and scalability. The use cases across manufacturing, healthcare and smart environments illustrate the transformational potential of AR and IoT. However, standardized interfaces, edge computing, tailoring security with usability, and responsible development focused on human benefits are crucial for realizing the promise of hybrid physical-digital ecosystems. This paper undertakes a systematic review of Augmented Reality (AR) and Internet of Things (IoT) convergence encompassing integration approaches, emerging use cases, and technical obstacles. A cross-disciplinary analysis strategy centered on real-world viability synthesizes opportunities and challenges for shaping responsible research directions across application domains.