The Internet of Things (IoT) has revolutionized the world, connecting billions of devices that offer assistance in various aspects of users’ daily lives. Context-aware IoT applications exploit real-time environmental, user-specific, or situational data to dynamically adapt to users’ needs, offering tailored experiences. In particular, Location-Based Services (LBS) exploit geographical information to adapt to environmental settings or provide recommendations based on users’ and nodes’ positions, thus delivering efficient and personalized services. To this end, there is growing interest in developing IoT localization systems within the scientific community. In addition, due to the sensitivity and privacy inherent to precise location information, LBS introduce new security challenges. To ensure a more secure and trustworthy system, researchers are studying how to prevent vulnerabilities and mitigate risks from the early design stages of LBS-empowered IoT applications. The goal of this study is to carry out an in-depth examination of localization techniques for IoT, with an emphasis on both the signal-processing design and security aspects. The investigation focuses primarily on active radio localization techniques, classifying them into range-based and range-free algorithms, while also exploring hybrid approaches. Next, security considerations are explored in depth, examining the main attacks for each localization technique and linking them to the most interesting solutions proposed in the literature. By highlighting advances, analyzing challenges, and providing solutions, the survey aims to guide researchers in navigating the complex IoT localization landscape.