Diffuse lipomatosis of the thyroid (DLT) is an uncommon condition where mature fat cells infiltrate the thyroid gland, disrupting its normal structure. Although rare, it typically manifests as neck enlargement or symptoms of compression, including breathing difficulties, trouble swallowing, and voice changes, which can complicate diagnosis. This report presents a case of a 61-year-old woman with DLT, who exhibited a multinodular goiter and progressive neck swelling, and examines 53 additional cases from the existing literature. The analysis indicates that DLT is frequently misdiagnosed because of its similarities with other thyroid disorders. The precise mechanism underlying its development remains uncertain, but theories include oxygen deprivation in tissues, developmental abnormalities, and disruptions in fat metabolism. Surgical removal is the preferred treatment, especially for patients experiencing symptoms, and has shown favorable long-term outcomes. Additional studies should aim to elucidate the exact cause of DLT and enhance diagnostic precision, particularly in distinguishing it from other fat-containing thyroid lesions such as amyloid goiter and adenolipomas. A deeper understanding of this condition will inform better treatment approaches and enhance patient outcomes for this uncommon but significant thyroid disorder.