When peripheral neuropathic pain affects a specific, clearly demarcated area of the body, it may be described as localized neuropathic pain (LNP). Examples include postherpetic neuralgia and painful diabetic neuropathy, as well as post-surgical and post-traumatic pain. These conditions may respond to topical treatment, i.e., pharmaceutical agents acting locally on the peripheral nervous system, and the topical route offers advantages over systemic administration. Notably, only a small fraction of the dose reaches the systemic circulation, thereby reducing the risk of systemic adverse effects, drug–drug interactions and overdose. From the patient’s perspective, the analgesic agent is easily applied to the most painful area(s). The 5% lidocaine-medicated plaster has been used for several years to treat LNP and is registered in approximately 50 countries. Many clinical guidelines recommend this treatment modality as a first-line option for treating LNP, particularly in frail and/or elderly patients and those receiving multiple medications, because the benefit-to-risk ratios are far better than those of systemic analgesics. However, some guidelines make only a weak recommendation for its use. This paper considers the positioning of the 5% lidocaine-medicated plaster in international treatment guidelines and how they may be influenced by the specific criteria used in developing them, such as the methodology employed by randomized, placebo-controlled trials. It then examines the body of evidence supporting use of the plaster in some prevalent LNP conditions. Common themes that emerge from clinical studies are: (1) the excellent tolerability and safety of the plaster, which can increase patients’ adherence to treatment, (2) continued efficacy over long-term treatment, and (3) significant reduction in the size of the painful area. On this basis, it is felt that the 5% lidocaine-medicated plaster should be more strongly recommended for treating LNP, either as one component of a multimodal approach or as monotherapy.