The manuscript focuses on the concept of nano-phosphors, a remarkable type of material that has been widely explored because of their diverse promising applications. Progress in the development of such nano-phosphors as luminescent materials has received significant research attention. The white-light-emitting diodes (WLEDs) have grown dramatically and represent the most intriguing lighting source of the twenty-first century. The contribution of rare-Earth (RE) ions to lighting technology is explicitly addressed. The additional physical characteristics of white light that are addressed in the present manuscript comprise the correlated color temperature (CCT), the color rendering index (CRI), and the Commission International de’ Eclairage (CIE) chromaticity coordinates. Multiple synthesis methods employed around the globe to produce such industrially important nano-phosphors along with more specialized and impactful techniques to characterize all such materials are thus thoroughly explored. Also, the various technologically significant applications of these materials are described. The evolution of these potentially suitable luminescent materials for WLEDs and their white-light characteristics is also outlined. The manuscript presents a comprehensive overview of the advancement and innovation of nano-phosphors, their application fields and the significant milestones of artificial lighting toward modernization.