The ever-evolving power grid demands advanced, intelligent metering solutions to enhance monitoring, efficiency, and real-time control. This paper presents the design and development of an innovative smart meter system that not only measures electrical parameters with precision but also facilitates intelligent decision-making using embedded control and sensor fusion techniques. The proposed system integrates an Arduino UNO R3, an ACS712-20A current sensor, a DHT11 humidity-temperature sensor, and signal conditioning components like OPAMP LM358 and XOR logic gates, ensuring both accuracy and adaptability. Input-side measurements record a voltage of 230 V, a current of 16.5 A, and a power factor of 0.98, while output-side data reflects 229.2 V, 15.74 A, and a power factor of 0.93, showcasing minimal losses and robust performance. Active and reactive power readings, along with real-time phase angle and frequency monitoring, further validate the model's applicability in smart grid systems. This cost-effective, modular smart meter prototype demonstrates excellent agreement between hardware and simulation results, proving its feasibility for deployment in both industrial and residential environments.