The growth of the Internet of Things (IoT) has increased the need for fast data processing, efficient bandwidth use, and stronger privacy protection. Traditional cloud systems often fall short in these areas, especially for applications that rely on immediate responses. Edge computing helps solve these problems by processing data close to where it is created. This makes systems faster, reduces the load on networks, and keeps sensitive data more secure. This work is a review paper about how edge computing is being used in IoT systems and how it supports real-time actions in areas like healthcare, smart cities, and industrial automation. It also looks at how edge computing works with 5G networks and Artificial Intelligence (AI) to allow devices to make quick decisions on their own. Several case studies show how these technologies improve daily operations and protect personal data. The paper also talks about current challenges such as the cost of setting up edge systems, keeping devices secure, and making sure different devices can work together. Even with these issues, the findings show that edge computing is becoming essential for building smarter and more reliable IoT systems.