Carbon-based nanomaterials, specifically carbon nanoparticles (CNPs) and carbon dots (CDs), are recognised as significant materials in materials science due to their distinct optical and physicochemical properties. Although these materials have been reviewed individually, a cohesive framework systematically differentiating their structural nuances, size-dependent mechanisms, and complementary applications is rarely presented. Therefore, this review addresses a specific gap in the current literature by rigorously comparing CNPs and CDs. A novel perspective is contributed by critically evaluating the transition from sustainable, 'green' chemistry synthesis using biomass precursors to their advanced, cross-disciplinary integration. The versatility of these materials is demonstrated through a categorised analysis of their applications. In the biomedical field, their utility in regenerative medicine, personalised diagnostics, and photothermal therapies is evaluated. Environmental applications, including massive pollution remediation and agricultural enhancement, are also discussed. Furthermore, the integration of these carbonaceous structures into advanced technologies, such as artificial intelligence, optoelectronics, and macroscopic defense systems, is explored. Finally, the critical bottlenecks associated with industrial scalability, long-term toxicity, and the necessity for standardised production protocols are addressed, providing a comprehensive roadmap for their future technological deployment.