Eczema (atopic dermatitis, AD) is a skin disease characterized by skin barrier dysfunction due to various factors, including genetics, immune system abnormalities, and environmental triggers. Application of emollients and topical drugs such as corticosteroids and calcineurin inhibitors form the mainstay of treatments for this challenging condition. This review aims to summarize the recent advances made in phytochemical-based topical applications to treat AD and the different carriers that are being used. In this review, the clinical efficacy of several plant extracts and bioactive phytochemical compounds in treating AD are discussed. The anti-atopic effects of the herbs are evident through improvements in the Scoring Atopic Dermatitis (SCORAD) index, reduced epidermal thickness, decreased transepidermal water loss, and alleviated itching and dryness in individuals affected by AD as well as in AD mouse models. Histopathological studies and serum analyses conducted in AD mouse models demonstrated a reduction in key inflammatory factors, including thymic stromal lymphopoietin (TSLP), serum immunoglobulin E (IgE), and interleukins (IL). Additionally, there was an observed upregulation of the filaggrin (FLG) gene, which regulates the proteins constituting the stratum corneum, the outermost layer of the epidermis. Carriers play a crucial role in topical drug applications, influencing dose delivery, retention, and bioavailability. This discussion delves into the efficacy of various nanocarriers, including liposomes, ethosomes, nanoemulsions, micelles, nanocrystals, solid-lipid nanoparticles, and polymeric nanoparticles. Consequently, the potential long-term side effects such as atrophy, eruptions, lymphoma, pain, and allergic reactions that are associated with current topical treatments, including emollients, topical corticosteroids, topical calcineurin inhibitors, and crisaborole, can potentially be mitigated through the use of phytochemical-based natural topical treatments.